TWE 157: The Hidden Costs of Social Media Regulation
A closer look at age-verification laws, the privacy risks they pose, and a better path forward.
Hello Friends!
We often hear that today is the best time in history to be alive. Technological advancements have transformed how we work, communicate, learn, and build businesses — improving quality of life in ways previous generations could only imagine.
But alongside that progress comes a powerful urge to regulate it.
When new technologies raise social concerns — especially around children — policymakers feel pressure to act. While these efforts often begin with good intentions, sweeping regulations can create serious risks to privacy, free speech, competition, and innovation.
One prominent example is the growing push to require App Store–level age verification systems as a frontline response to youth mental health concerns.
This legislative session alone, proposals have surfaced in Wisconsin, Colorado, Georgia, South Dakota, Alabama, Florida, Virginia, Kansas, and beyond.
Supporters argue these measures will protect children. But the proposed regulatory frameworks raise significant questions about privacy, constitutional rights, and market competition.
In this episode of This Week’s Economy, I explore how we got here, the policy and economic tradeoffs embedded in these proposals, and a better path forward — one that empowers parents rather than expanding government control.
Tune in to the full episode on YouTube, Apple Podcast, or Spotify, and visit my website for more information about Ginn Economic Consulting.
HOW WE GOT HERE
In recent years, we’ve seen a surge of social media bans and age-verification proposals across the globe. From Europe and Australia to states here in the United States, lawmakers are advancing legislation that would require minors — and often all users — to verify their age before accessing online platforms.
For many politicians, restricting social media has become a seemingly quick solution to growing concerns about teen mental health and online safety. Much of the momentum behind this movement stems from Jonathan Haidt and his book The Anxious Generation, which argues that the rapid adoption of smartphones and social media has rewired childhood and fueled a mental health crisis.
While these proposals may be well-intentioned, they introduce significant privacy risks and raise serious constitutional and practical concerns.
A recent decision by the U.S. Supreme Court in Free Speech Coalition v. Paxton upheld a Texas law requiring certain commercial websites dominated by sexually explicit content to verify users’ ages. The Court applied intermediate scrutiny, concluding that the law primarily regulated material deemed obscene as to minors while only incidentally burdening adult access to protected speech.
But the ruling was narrow.
The Court did not decide whether similar age-verification mandates could be extended to app stores, social media platforms, or mixed-content digital services used daily by both adults and children. Those environments host vast amounts of lawful speech. Requiring users to submit sensitive personal information to access them raises unresolved questions about privacy, free expression, and implementation.
So how should lawmakers respond?
Let’s examine these policy proposals, their risks, and a better path forward — one that empowers parents while protecting constitutional freedoms.
1. Seek a Real Evidence Basis for Policy
The Principles:
A growing number of lawmakers are convinced they’ve found the culprit behind rising teen anxiety and depression: the smartphone. Many states are proposing bills that would mandate App Store–level age verification systems as a frontline solution to youth mental health concerns. That leap — from an ongoing social science debate to a sweeping compliance regime — deserves serious scrutiny.
Sound public policy requires more than a compelling narrative. It requires credible evidence, clear causation, and a careful weighing of tradeoffs. When regulation moves faster than the research, unintended consequences often follow.
Why it Matters:
A Compelling — but Incomplete — Narrative:
Much of the momentum behind these bills traces back to Jonathan Haidt and his book The Anxious Generation, which argues that smartphones and social media have driven a youth mental health crisis. It’s a powerful story — but correlation is not causation. A persuasive thesis is not the same as settled science.
Multiple Forces Shaping Teen Mental Health:
Teen depression has risen over the past decade — but so have COVID lockdowns and school closures, social isolation, academic pressure, family instability, economic uncertainty, and a decline in in-person community. Smartphones were present, but so were many other major disruptions. Even academic research shows mixed results, with some studies finding modest effects that shrink when broader variables are taken into account. The causal chain is far more complex than a single device.
Simple Regulations Won’t Solve Complex Problems:
Public policy built on monocausal explanations in a multivariable world often backfires. Sweeping mandates based on the assumption that “the phone did it” risk imposing heavy compliance costs while missing the deeper drivers of youth mental health challenges. Complex social problems rarely yield to simple regulatory fixes.
Related Reading: I explore mounting pressure to regulate social media in the states — and what it could mean for innovation, privacy, and federalism — in my recent Substack piece.
2. Protect Online Privacy and Speech
The Principle:
Proposed policies would require app stores to build age-verification infrastructure — potentially including digital ID systems, sensitive data collection, and centralized permission frameworks. That creates serious concerns for privacy, free speech, and competition. And none of it proves the core premise: that restricting app downloads will materially improve teen mental health outcomes.
Why it Matters:
Serious Privacy Risks:
Age verification often requires uploading government-issued IDs or other sensitive personal data. That means creating massive new databases — prime targets for hackers and misuse. In the name of protecting children, policymakers could end up exposing millions of users, including adults, to identity theft and data breaches.
First Amendment Concerns:
Forcing users to verify their age before accessing lawful content raises significant constitutional questions. Adults would face new barriers to speech simply to avoid platform liability. A policy framed as child protection risks restricting lawful adult expression.
Higher Barriers to Entry:
These mandates would not only affect large tech firms. Compliance costs and legal uncertainty also burden smaller platforms and startups, which lack the resources to absorb new regulatory infrastructure. The result could be less competition, fewer choices for families, and further entrenchment of dominant players.
Related Reading: At The Center Square, I explored the unconstitutional nature of a Florida bill that would violate the First Amendment.
3. Learn from Other Countries
The Principle:
State and federal lawmakers are increasingly looking abroad for a policy blueprint. For example, Texas State Rep. Jared Patterson recently suggested Texas should follow Australia’s lead in restricting minors’ access to social media, citing youth mental health concerns.
But cross-national comparisons often ignore a crucial fact: other countries do not operate under the same constitutional framework as the United States. Policies that may be legally permissible — or politically popular — elsewhere may conflict directly with America’s deep commitments to free speech and limited government.
Why it Matters:
Different Free Speech Foundations:
Australia has moved forward with restrictions on minors’ access to social media. But Australia does not recognize free speech as a fundamental constitutional right as the United States does under the First Amendment. Policies that clear legal hurdles there would face serious constitutional barriers here.
Conflicting Liberty Traditions:
Australia’s recent history shows how readily its government defaults to centralized control. During COVID, it imposed some of the longest and most restrictive lockdowns in the democratic world, enforced through travel bans and aggressive policing. Americans who value liberty should be cautious about importing policy models from systems that balance freedom and government power differently.
Europe’s Precautionary Approach:
The European Union’s Digital Markets Act and Digital Services Act impose sweeping obligations on large platforms based largely on size rather than demonstrated consumer harm. These rules raise fixed compliance costs that smaller competitors struggle to absorb, potentially entrenching incumbents rather than encouraging competition. Precautionary regulation may sound protective — but it can unintentionally stifle innovation without clear evidence of improved outcomes.
Related Reading: I explain in more detail why Australia’s social media bans cannot serve as a straightforward model for U.S. policy.
4. Empower Parents
The Principle:
The uncomfortable truth is that no statute replaces engaged parenting. No compliance checklist solves cultural fragmentation or social isolation.
Protecting children is a legitimate public concern. Harmful content exists. But that does not mean we hand the reins to government bureaucrats or force private businesses to be digital babysitters.
Why it Matters:
Policy Can’t Replace Parenting:
Age-verification mandates assume government regulation can substitute for parental judgment. It cannot. Parents already have tools — device settings, content filters, account controls, and direct supervision — that are more flexible than one-size-fits-all regulation. Families can make decisions based on age, maturity, and values, not legislative guesswork. And yes, parents can decide when their children are ready for certain apps — or whether they’re ready at all.
Better, Decentralized Alternatives Exist:
Device-level parental controls continue to improve. Platforms can expand transparency tools without mandatory ID systems. Schools can invest in digital literacy education. Law enforcement can target unlawful exploitation directly. These approaches strengthen families without constructing centralized verification regimes.
Mandates Tend to Expand:
Blanket restrictions often crowd out parental responsibility while delivering limited protection. Once lawmakers deputize platforms as age police, it becomes easier to justify more mandates, more oversight, and less family autonomy — all under the banner of “safety.” Good policy starts with humility. Parents know their children better than legislators ever will. Trusting families over bureaucratic mandates isn’t radical. It’s foundational to a free society.
Related Reading: When Texas lawmakers considered similar legislation, I explained why empowering parents — not politicians — is the better path.
5. Slow Down Before Regulating
The Principle:
When multiple states rush to impose digital ID mandates based on contested correlations, litigation is almost inevitable. Policy reversals are messy. Regulatory infrastructure, once built, rarely shrinks.
Before turning smartphones into the villain, policymakers should remember a simple principle: complex social problems rarely yield to simple regulatory fixes. Good intentions do not justify poorly designed mandates.
Why it Matters:
Ask Harder Questions First:
Protecting children and addressing teen mental health is a legitimate public concern. But the answer will not be found in a single bill number. Lawmakers should ask: Is the causal evidence strong enough to justify statewide ID systems? Are we unintentionally entrenching dominant platforms through compliance costs? Are we substituting government mandates for parental authority?
Teach Skills Instead of Defaulting to Bans:
Blanket bans ignore reality. Today’s teens will become tomorrow’s adults. Shielding them entirely from the digital world may leave them less prepared to navigate it responsibly. Skill-building, digital literacy, and guided exposure equip young people far better than sweeping prohibitions — and they keep parents, not bureaucrats, in the primary decision-making role.
Invite Solutions Before Imposing Mandates:
Rather than rushing to restrict access, policymakers should categorize concerns and invite input from parents, educators, technologists, and mental health experts. Thoughtful, evidence-based approaches take time — but they are far more likely to strengthen families without creating rigid, centralized systems that are difficult to unwind.
Related Viewing: On Episode 115 of Let People Prosper, Jessica Melugin and I explore better alternatives to the outright banning of social media for minors.
Bottom Line
The debate over social media regulation is not a choice between caring about kids and defending tech companies. It’s a question of whether we will respond to a complex social challenge with careful, evidence-based policy — or with sweeping mandates built on contested assumptions.
Critics of these bills aren’t saying “do nothing.” They’re saying do better.
Real solutions focus on empowering parents rather than regulating everyone else — clear disclosures, robust parental controls, digital literacy education, and strong enforcement of existing laws against actual criminal behavior. That approach respects families, protects privacy, preserves constitutional freedoms, and avoids turning private companies into extensions of the state.
Protecting children is a legitimate goal. But good policy requires humility, constitutional guardrails, and a recognition that complex problems rarely yield to simple regulatory fixes. If we slow down, ask better questions, and trust families first, we can address real concerns without sacrificing the principles that make a free society possible.
FOR MORE, CHECK OUT MY NEW TECHNOLOGY POLICY GUIDE
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God bless you, and let people prosper!
