Can we regulate attention?

In today’s Finshots, we talk about the ongoing calls to regulate social media use for teenagers around the world.

The Story

Over the last few weeks, something interesting has unfolded around the world. What began as a well-known moral panic about teenagers glued to their phones began to turn into politics.

Australia you passed a law banning social media for children under 16. France You have limited access for those under 15. Florida you have introduced its own age-based ban. The UK and the United States also debates similar measures.

And what makes it particularly interesting for us is that India is also considering similar age-based restrictions.

On the one hand, the government talked about fostering the “Orange Economy.” We have explained it in detail herebut in a nutshell it’s nothing more than supporting the creator economy, promoting influencers and even setting up “social media labs” in schools.

On the other hand, there is also a growing discussion about limiting access to social media for those very students.

You see, worldwide, thousands of tech giants are fighting lawsuits that claim their algorithms fuel addiction, anxiety and depression among teenagers. And the conversation is often framed as “mental health vs. digital freedom”. Underneath that framework, however, lies a larger economic question: What happens when a country with India’s demographic profile decides to limit the youth’s access to the attention economy?

Let’s start with what the government thinks.

The 2025 ASER (Annual Status of Education Report) estimates this 57% of children aged 14-16 use smartphones for educational purposes. But over 75% of the same children use smartphones for social media.

India’s Economic Survey You also warned that compulsive screen use and digital addiction have measurable economic costs. Social media platforms are designed around engagement. Comparison, validation loops and constant stimulation are their core features.

Thus, if even a portion of increased adolescent anxiety, body image distress, and depressive symptoms are linked to prolonged exposure to social media, then the long-term economic implications are substantial.

Because mental health problems do not remain private issues. This leads to lower educational outcomes, reduced labor force participation, higher health care expenditures and reduced productivity.

Social media also comes with a cognitive cost. How many times have we scrolled through Twitter or Reddit in the middle of the night? This excessive screen time causes sleep debt and reduces your overall productivity the next day. This ultimately leads to a vicious cycle where fatigue makes you more prone to distraction, which pushes you back to the same apps for stimulation, further eroding focus, decision-making ability and your mental well-being.

From this perspective, regulation begins to look less like moral policing and more like preventive economic policy. If limiting early exposure improves long-term human capital formation, the state may see intervention as an investment in future productivity. And they are not wrong.

Yet the counterarguments are equally significant.

First, several research articles (this this and thisto name a few) link social media use to mental health outcomes in a correlational, rather than cause-and-effect, manner. Teens who are already vulnerable may be more likely to engage heavily in social media. This makes it difficult to determine whether platforms are causing distress or simply reinforcing existing conditions. Designing blanket prohibitions based on incomplete causal evidence may oversimplify a complex behavioral issue. However, the same research mentions that we need to dig deeper into this. So let’s not rule it out.

Second, bans rarely eliminate behavior. VPNs (virtual private networks or simply a way to access the internet by hiding your IP address), encrypted messaging apps, secondary accounts and less regulated platforms are easily accessible. Thus, an outright ban or even heavy regulation could drive underground use, simultaneously reducing parental oversight and platform accountability. Thus, in an effort to protect adolescents, regulators may inadvertently push them into spaces with fewer safeguards. And it is even more dangerous.

Third, social media is not simply a recreational activity. Almost 90% of teenagers between the ages of 14 and 16 now have smartphone access, and a majority regularly use social platforms. For brands, this group represents a distinct consumer segment whose tastes, aspirations and purchasing habits are shaped online.

Youth discover products, services, music, fashion and career paths through digital exposure. A heavy-handed ban would remove a primary discovery channel, forcing brands to find alternative routes that are often more expensive and less effective. Marketing costs can rise, and small creators who rely on young audiences can struggle to survive.

And above all, there is also a deeper privacy concern embedded in enforcement. Age-based bans require age verification. How would this work in practice? Will users have to submit Aadhaar details or birth certificates to private corporations? How will regulators distinguish between personal accounts and brand accounts managed by the same individual?

Any system strong enough to verify age at scale can also centralize large amounts of sensitive data. This creates new risks around surveillance, data misuse and possible suppression of dissent.

And these challenges, folks, highlight the broader dilemma.

Regulating attention is not like regulating alcohol or tobacco. Attention is linked to speech, commerce, identity, innovation and much more. Social media is both a public square and a marketplace. It shapes mental health outcomes, but it also shapes economic participation.

The economic consequences of the restriction would therefore be multifaceted. On the plus side, reduced exposure can lower mental health costs, strengthen concentration, and improve educational performance. On the negative side, it can slow down ‘the knowledge economy’, limit informal entrepreneurial opportunities and increase friction in youth-oriented markets.

For a country like India, where the demographic dividend is a primary driver of growth, this trade-off becomes even sharper. Young Indians are not only users of social media; they are creators, small business owners, freelancers and digital natives whose economic lives are intertwined with online platforms. Limiting access may protect some from harm, while simultaneously limiting the channels through which others build careers.

A blanket ban or even a heavy restriction therefore functions as a blunt instrument. It can address visible damage but cause invisible. The challenge lies in designing regulations that mitigate addictive design patterns without completely eroding digital participation.

A possible solution is to make social media algorithms open source (meaning their source code is publicly available for inspection, modification and redistribution) or at least more transparent. This would allow independent researchers to audit them for bias and manipulation, and enable public scrutiny of how attention is shaped and monetized. It also fosters a competitive pressure on platforms to prioritize user well-being over just engagement metrics.

Apart from this, platforms can implement stricter parental controls, time-based limits and restrictions that parents can set, rather than the state.

However, this debate is unlikely to be resolved in a simple yes or no. The question is not whether social media carries risks; it clearly does. The question is whether restriction by government is the most rational way to address those risks.

Until then…

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