Striking the perfect social media regulation balance

Economic node

Yet social media, while a very real source of social harm, also serves as a critical node in economic systems—a role particularly pronounced in emerging markets.

Social media platforms now operate as multi-layered economic environments. Globally, the digital economy accounts for an estimated 15-25% of GDP, with social platforms playing a central role by lowering marketing costs, facilitating consumer discovery, and enabling new forms of digital labour.

In Egypt, this economic dimension is increasingly visible. The digital economy contributes an estimated 4-5% of GDP, with social media-driven activity accounting for a substantial share of SME marketing, informal commerce, and creator income. Egypt has more than 50 million social media users, many of whom rely on platforms such as Facebook, Instagram, TikTok, and WhatsApp as primary tools for sales, customer engagement, and brand building.

For small and medium-sized enterprises—which employ the majority of Egypt's private-sector workforce—social media offers an affordable alternative to traditional advertising and retail infrastructure. For micro-entrepreneurs, particularly women and home-based businesses, these platforms often constitute the entire commercial interface.

In the Gulf, the same dynamics operate at a greater scale. Across the GCC, the digital economy is estimated to account for between 8-12% of GDP, supported by high connectivity, digital payments, and platform-based commerce. Social media advertising expenditure in the Gulf runs into the billions of dollars annually, with Saudi Arabia and the United Arab Emirates ranking among the region's largest digital advertising markets.

In Saudi Arabia, more than 90% of internet users are active on social media, and platforms play a central role in the country's rapidly expanding creator economy, e-commerce sector, and SME digitisation agenda under Vision 2030. In the UAE, where SMEs contribute roughly 60% of GDP, social platforms are critical channels for market access in an increasingly competitive and high-cost business environment.

In both Egypt and the Gulf, social media has become foundational infrastructure rather than an optional layer of economic activity. This reality places limits on how far access can be restricted without generating economic disruption.

Regulation risks

Because social media is so deeply embedded in economic life, restrictive or poorly calibrated regulation carries significant risk. International experience demonstrates that abrupt platform shutdowns or overly rigid access limitations tend to disrupt small businesses, reduce income for creators and freelancers, and push activity into informal or unregulated digital spaces. These outcomes often undermine the very social objectives regulation seeks to achieve.

The protests that followed Nepal's 2025 shutdown of multiple social media platforms illustrate this dynamic clearly. What began as a regulatory intervention quickly evolved into an economic grievance, as young users lost access to income streams, professional networks, and cross-border opportunities. In economies with high youth unemployment, such as many in the Middle East, the consequences of similar disruptions would be amplified.

This is not an argument against regulation itself. Rather, it highlights the need for precision. When regulation fails to distinguish between social risk and economic function, it risks eroding trust, participation, and policy legitimacy.

A more effective regulatory approach is purpose-driven moderation—recognising that social media serves multiple functions and that these functions warrant different policy responses. When it comes to children and adolescents, stronger safeguards are both justified and necessary. Age-appropriate design standards, limits on algorithmic amplification, parental consent mechanisms, and restrictions on exploitative advertising can significantly reduce harm without eliminating access altogether. Such measures are increasingly standard in advanced digital economies and reflect an emerging global consensus.

For adults and businesses, however, regulation should focus less on access and more on market integrity. Clear rules on data protection, advertising transparency, consumer rights, and platform accountability can strengthen trust and investment without undermining participation. Content governance, meanwhile, is most effective when it emphasises platform responsibility and enforcement clarity rather than blanket suppression, which often proves both ineffective and economically damaging.

This layered approach is evident in parts of Asia. India, despite ongoing debate about age limits, has prioritised data protection and parental consent while safeguarding platform-based entrepreneurship in a market of more than 750 million smartphone users. Japan and South Korea have strengthened platform accountability and transparency, while relying on school-level interventions to address youth harm rather than imposing economy-wide restrictions. In Latin America, Brazil's evolving framework similarly combines age-verification requirements with continued openness to digital advertising and e-commerce, recognising the importance of platforms to informal employment and small businesses.

Digital literacy

Regulation alone, however, is insufficient. As digital platforms become more central to economic and social life, digital literacy must be treated as a core policy objective, not a secondary consideration, from an early age. Children and adolescents will continue to encounter social media regardless of formal restrictions. Equipping them with the skills to navigate these environments critically, responsibly, and productively is therefore essential.

Digital literacy is often framed as a social or educational issue, but it is also an economic one. Future labour markets will increasingly reward digital fluency, content discernment, and platform-based skills. Countries that invest early in digital literacy are better positioned to harness the economic benefits of technology while mitigating its risks. Education systems that integrate digital citizenship, media literacy, and online safety from a young age create more resilient users and more sustainable digital economies.

In this sense, restriction and education should be understood as complementary rather than opposing strategies. Moderation reduces exposure to harm during vulnerable developmental stages, while education builds long-term capacity for responsible and productive engagement.

From control to stewardship

Ultimately, effective social media governance is less about control than about stewardship. Governments are being asked to guide technologies that are socially powerful and economically indispensable, shaping incentives and standards without suffocating participation. This requires evidence-based policy, continuous engagement with health, education, and business stakeholders, and a willingness to adapt as platforms and behaviours evolve.

The path forward lies in purpose-driven moderation combined with early and sustained digital literacy. Protecting the vulnerable, preserving economic participation, and preparing societies for a digitally mediated future are not competing objectives; rather, they are interdependent ones.

Smart governance, grounded in evidence and attentive to both social and economic realities, offers the most credible way to ensure that social media remains a tool for opportunity rather than a source of lasting harm.