The plans will need to be negotiated with EU countries and the European Parliament in the coming months before they can become law.
Under the proposal, social media accounts for children between the ages of 13 and 15 will be under parental control.
Social media and video-sharing services, online video games, AI companions and chatbots for children below 18 will be subject to a list of dos and don'ts.
These include a ban on addictive features, profiling-based recommender feeds, infinite scroll, reward tricks and unsolicited contact from strangers. AI companions and chatbots must be turned off by default.
Online platforms must design algorithms safe for children and provide easy-to-use parental controls and tools to block and mute users.
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The move follows similar initiatives in Australia, the UK, China, India, Turkey and several EU countries, underscoring rising concerns about the impact that Facebook, Instagram, TikTok, YouTube and ChatGPT have on children's mental health and safety.
Australia's challenges in enforcing its world-first social media ban for children under 16, however, could see Europe facing an uphill battle as well.
"Today, our children are engaging with some of the most sophisticated technology ever created, and it was not created with children's well-being and development in mind," von der Leyen told a press conference on Thursday.
She said the proposed EU Kids Act "will set clear boundaries in the digital world just as we do it on a daily basis in the real world".