The recent regulatory actions in the United States and the European Union serve as a sharp warning to global digital platforms: Compliance failures are receiving increasingly assertive regulatory oversight, accompanied by more severe penalties.
In Brussels, the European Commission has opened proceedings against four major adult websites, Pornhub, Stripchat, XNXX and XVideos, alleging violations of the Digital Services Act related to the protection of minors. According to the commission, these platforms failed to implement effective age-verification systems and did not adequately safeguard underage users.
If the findings are upheld, these companies could face steep fines representing up to 6 percent of global turnover.
Across the Atlantic, Florida enacted a law in January requiring adult sites to verify the age of users. Pornhub responded by blocking access in the state altogether, while others, including XVideos, remained accessible without any verification.
Florida’s attorney general has launched investigations, while a lawsuit challenging the law on constitutional grounds works its way through the courts.
Though these cases concern the adult content industry, the broader implications are clear for all businesses operating across multiple jurisdictions. Fragmented legal frameworks, heightened scrutiny of privacy and safety, and the rapid pace at which new regulations are enacted make it risky for companies to rely on reactive legal strategies.
What these cases illustrate is the growing cost of compliance failure, and the critical need for companies to build internal mechanisms, or external (vendors) capable of identifying and addressing risk before regulators intervene. At the core of this capability should be a well-resourced, independent internal investigations and due-diligence team empowered to identify and mitigate risk against the regulatory landscape.
Historically, compliance functions have operated in silos, often reporting into legal or risk departments with limited authority. That is no longer sufficient. Today’s enforcement landscape requires proactive, cross-functional oversight, one that blends legal awareness with operational insight and regional expertise. Internal investigations units must be capable not only of reviewing policy adherence but of anticipating regulatory trends and evaluating the company’s exposure across markets. The team must know the local landscape to prevent global exposure.
The financial rationale is straightforward. The penalties under consideration in the EU are enough to damage even well-capitalized firms. The broader costs, prolonged litigation, reputational damage, user attrition, and declining investor confidence pose even greater risks to long-term value.
This shift is urgent for firms operating in industries where regulators are playing catch-up to innovation, technology, entertainment, finance and healthcare, among others. The era of “wait and see” is over. Regulators are no longer content with retrospective apologies or after-the-fact reforms. They are increasingly demanding that companies demonstrate continuing, demonstrable efforts to comply and prevent.
Moreover, as jurisdictions move forward with more prescriptive regulatory frameworks, including those related to privacy, child safety and algorithmic accountability, companies must be able to audit their practices to avoid the blind spots that external investigations inevitably uncover.
Building a credible internal investigations function is not without cost. However, it is far less expensive than the consequences of noncompliance. It is also an investment in resilience. In an environment where trust is a competitive advantage, companies that can credibly demonstrate robust oversight mechanisms are better positioned to engage with regulators, retain users and protect shareholder value.
Internal due diligence is no longer a legal safeguard, it is a strategic imperative. Companies that understand this early will not only stay ahead of regulation but turn compliance into a source of strength, not strain.
