I. Executive Summary

In the 21st century, a new form of digital commodity has emerged as a central feature to our economy as a whole: attention. The “attention economy” as coined by economist Herbert Simon in the 1970s refers to the valuation and monetization of consumer’s “attention” through their engagement with content and advertisements. Although realized before the internet age, the “attention economy” as we know it today is brokered by massive digital platforms like Meta, Tiktok, Youtube, and others. In this system, social media platforms provide a “free” service by providing users with endless amounts of algorithmically curated content. To support this model, social media platforms sell hyper-targeted ad space to advertisers. By using the same algorithm that provides users with mountains of content, social media platforms can extract billions of dollars in “engagement” (clicks, shares, likes, and views) through the sale of hyper-specific ads. In 2026, an estimated 338.75 billion dollars in ads will be sold through social media alone. 

The idea of exchanging content for ad-space is far from novel. Advertisers have been paying entertainment providers to advertise their products since the golden age of television. The concerning feature of the current digital advertising landscape is the addictive nature of these platforms. In an interview for her book Dopamine Nation Anna Lembke M.D. explains why social media is so addictive, saying, “Social connection has become druggified by social-media apps, making us vulnerable to compulsive overconsumption. These apps can cause the release of large amounts of dopamine into our brains' reward pathway all at once, just like heroin, or meth, or alcohol… Add to that the artificial intelligence algorithms that learn what we've liked before and suggest new things that are similar but not exactly the same, and we're off and running.” Gen-Z has proven especially vulnerable to this technology as the first generation for whom social media has existed their entire lives. Studies have shown that a third of teenagers spend the majority of their time on one of the major social media platforms, and that those who spend more than three hours a day on social media experience an elevated risk of mental health problems. The necessity of advertising to make social media free for everyone has incentivized corporations to make their service as addictive as possible. 

While social media companies frequently argue that user habits are separate from platform design, companies like Meta and Google have been found liable in court for their intentionally addictive features such as videos that play automatically to focus user attention and feeds that update constantly to promote infinite scrolling. Nations like the UK and Australia have begun trying to regulate social media exposure, initiating programs that restrict those under 16 from accessing the platforms. More must be done to combat the dangers of social media. Current regulation has repeatedly proven outdated. Specialized digital policy, focused on curtailing the promotion of addictive content, the brokerage of user data, and the targeting of vulnerable users must be created to protect consumers from becoming unwilling participants in the “attention economy.”

II. Overview

A. What Is the Attention Economy?

The "attention economy" refers to a business model in which human attention is treated as a scarce and monetisable resource. An economy in which human attention is a scarce, monetizable resource is called the ‘attention economy’. Platforms such as Instagram, TikTok, and YouTube are free to use, as is the product (in this case, the time and attention of the audience) that is sold to advertisers. The more time users spend on a platform, the more ad impressions are served and the more revenue is generated (Wu, 2016). This logic makes maximising user engagement a core commercial imperative.

B. How Platforms Engineer Engagement

Platforms deploy several design mechanisms specifically built to extend session time. Algorithmic recommendation systems present more and more personalised and emotionally engaging content. Infinite scroll does away with natural stopping points and instead provides an endless feed. Autoplay eliminates the hassle of a decision to keep watching and starts the next video for you. The concept of notification systems, which have variable reward schedules (Fogg, 2002; Harris, 2016), is directly adapted from behavioural psychology. None of this is accidental; these features are the result of years of A/B testing oriented toward a single metric: retention.

III. History

A. Current Stances

Gen Z's Unique Exposure

The generation between 1997 and 2012, the “generation Z,” is the first to have  grown up entirely inside this engineered environment. Gen Z grew up in a world where feeds and push notifications are algorithmically curated, as opposed to older generations who grew up with smartphones as teens or adults. This is developmentally important because during adolescence, habits of attention, self-regulation and learning are formed and for Gen Z, this happened in the context of engagement-optimized technology (Twenge, 2017). 

Screen Time Statistics

The data on Gen Z usage is striking. American teenagers now average over four hours of daily recreational screen time, excluding schoolwork (Common Sense Media, 2023). Instagram, TikTok, YouTube, and Snapchat consistently rank among the most-used apps for under-25s. A 2023 Gallup survey found that nearly half of American teenagers felt they spent too much time on social media, indicating that awareness of the problem is widespread even among those most affected (Gallup, 2023).

Broader Implications: Productivity, Education, and Digital Dependence

The concern extends beyond screen time as a metric. Time displaced by algorithmically driven content is time not spent reading, building sustained concentration, or doing deep work. Researchers have linked heavy adolescent social media use to declines in attention span and increased rates of anxiety and depression, though these findings remain debated (Haidt and Allen, 2020). From an economic perspective, the platform model generates private profit by consuming a resource, namely the focused attention of young people, that carries significant social value when directed toward education and productive activity. Digital dependence compounds the problem: features like streaks, likes, and recommendation queues create psychological investment that makes disengagement feel costly, particularly when social life itself is organised through these same platforms.

‍B. Tried Policy

What Existing Privacy Protections Were Designed to Do

The most significant federal privacy law governing young people's online activity is the Children's Online Privacy Protection Act, better known as COPPA. It was enacted in 1998 and updated in 2013, COPPA makes it illegal for commercial websites to collect identifying information about children under the age of 13 without verifiable parental consent. While it was meaningful during its time active, COPPA was designed for a fundamentally different internet: one that predated algorithmic feeds and behavioral targeting for monetization. The law addresses data collection in a narrow sense but says nothing about how platform recommendation systems are built to exploit psychological vulnerabilities or how advertising revenue is generated from minors' behavioral profiles. Its age threshold of 13 has also become more difficult to justify as the primary boundary of protection, since teenagers well above that cutoff are among the most heavily targeted users on major platforms.

Device-Level Wellness Tools: A Limited Response

In the absence of comprehensive platform regulation, much of the responsibility for managing screen time has been shifted onto individual users and their devices. Major operating systems like Apple's iOS with "Screen Time" and Google's Android with "Digital Wellbeing" have integrated features that provide users with detailed reports on app usage through the ability to set time limits for individual applications and scheduled downtime to restrict notifications. These tools represent a genuine attempt to give users more control over their digital habits, but they fall well short of addressing the structural problem. As noted within this brief, platform defaults are built to maximize engagement and opt-in wellness features do little to change that underlying incentive. Neither Apple nor Google's system locks users out completely, which allows users to bypass limits with a single tap. For younger users especially, the effectiveness of these tools depends entirely on the willingness of the user or their parents to set them up and enforce them, placing the burden of correction on the individual rather than the system creating the problem.

Congressional Hearings: Visibility Without Action

Congressional attention to platform harms has grown considerably in recent years, though it has not yet translated into comprehensive legislation. In January 2024, the CEOs of Meta, TikTok, X, Discord, and Snapchat testified before the Senate Judiciary Committee as lawmakers and parents grew increasingly concerned about the effects of social media on young people's lives, with issues including addictive features, suicide, eating disorders, and cyberbullying at the center of the discussion. In a moment during the hearing, Meta CEO Mark Zuckerberg turned to address families of victims in the audience and apologized directly. The hearings generated significant public attention and political pressure, but critics noted that dramatic moments rarely translate into enforceable policy. Former Meta engineering director Arturo Béjar, who testified before Congress, stated that platforms "know how much harm teens are experiencing, yet they won't commit to reducing it, and most importantly to be transparent about it" (Fortune, 2024). The hearings exposed how far the industry's self-regulatory commitments have fallen short, but without binding legislative follow-through, they remain largely symbolic.

Legislative Attempts: Progress Stalled

The most notable domestic legislative effort to address social media harms has been the Kids Online Safety Act, or KOSA. Sponsored by Representatives Gus Bilirakis and Kathy Castor and supported by a coalition of nearly 200 organizations, KOSA aims to curb the harms associated with social media use in adolescence by requiring platforms to prioritize the well-being of minor users. The bill would require covered platforms to take reasonable measures to prevent and mitigate harms to minors, provide young users with settings that restrict access to their personal data, and disclose details about the use of personalized recommendation systems and individual-specific advertising directed at minors. The Senate passed KOSA with a final vote of 91–3, a once-in-a-bluemoon display of bipartisan agreement. However, the House failed to act on it before the end of the legislative session, and the bill has had to be reintroduced. As of 2025, KOSA still requires a passage from Congress and a presidential signature to become law, leaving one of the most substantive reform efforts in recent memory in legislative limbo.

International Efforts: The Global Test Case

Outside the United States, some governments have moved more decisively. For instance, Australia passed the Online Safety Amendment (Social Media Minimum Age) Bill 2024, introducing a mandatory minimum age of 16 for accounts on certain social media platforms, with the law coming into effect on December 10, 2025. Parents cannot provide consent to override the restriction. Australia's action has triggered a broader international conversation. In November 2025, the European Parliament voted to adopt a report supporting an EU-wide digital minimum age of 16 for accessing social media, video-sharing platforms, and AI companions, and called on the European Commission to introduce age assurance systems alongside a ban on the most harmful and addictive platform practices. As of early 2026, countries including France, the United Kingdom, Malaysia, Germany, Italy, Greece, and Spain are also considering similar bans or restrictions for users under 16. These international efforts signal a growing consensus that platform self-regulation has failed, but they also reflect a narrow focus on age as the primary policy lever rather than engaging with the deeper structural problem of engagement-driven business models.

The Gap That Remains

Together, what these efforts reveal is a patchwork of partial measures where privacy rules predate the algorithm, high-profile hearings that generate pressure without producing law, and age restrictions that address access without addressing the design. None of the existing or proposed policies directly targets the core economic incentive: platforms profit by maximizing attention. Until policy catches up with the business logic driving these platforms, the protective gaps left by COPPA, stalled legislation like KOSA, and voluntary digital wellness features will continue to leave young users without the structural protections they need.

IV. Policy Problem

A. Stakeholders

Young People and Families

Young people are the primary stakeholders in the attention economy. This is due to their high usage rates on social media sites and engagement driven digital platforms. Gen Z has grown up in an environment with algorithmically curated content, hyper-personalized content recommendations, and targeted ads. As such, Gen Z individuals may be uniquely impacted through excessive screen time, addiction to digital tools and manipulative design practices by online services. Family members and parents have a direct stake in the issue as they are responsible for monitoring the digital habits of children while also navigating these systems intentionally designed to maximize engagement.

Technology Platforms

Social media companies and video sharing platforms have a direct interest in how users interact with their platforms because those interactions create the basis for their ability to attract ad dollars. These companies make money from social media use through advertisements that target active users. While these companies provide valuable services and economic opportunities, they also face growing pressure to increase transparency, improve user protections, and address concerns surrounding addictive design features and algorithmic accountability.

Advertisers and Data Brokers

The attention economy provides advertisers with access to highly targeted audiences. Digital advertising is now among the highest revenue-generating areas in the world due to its use of behavioral information and personalization. The reforms that are being discussed (transparency, limiting how much data can be collected, restrictions on targeting children) have the potential to significantly reduce an advertiser's ability to effectively reach consumers and measure the success of their spending.

Schools, Educators, and Mental Health Professionals

Educational institutions and mental health professionals are encountering the growing impact of excessive digital usage on students' lives. Teachers report challenges related to shortened attention spans and classroom distractions, while counselors and healthcare providers address concerns about anxiety, stress, and unhealthy online habits. These stakeholders have an interest in promoting digital literacy and ensuring that technology supports rather than undermines educational and developmental outcomes.

Policymakers and Regulators

Legislators and regulatory bodies have a responsibility to balance competing priorities of consumers, free speech and constitutional rights, technological innovation, and economic development. Policymakers must determine whether existing laws adequately address the challenges posed by algorithmic recommendation systems and engagement-based business models. Their challenge is to create effective safeguards without unnecessarily restricting technological innovation or freedom of expression.

B. Risks of Indifference

The Incentive Problem

The attention economy’s design, to some extent, fails by its very design and structure. Digital platforms, which may range from social media companies to streaming services, do not generate revenue from making their users better informed or more civically engaged. Rather, the most important target these enterprises value is the attention and usage time of their users. This is because they generate revenue by selling targeted advertising; the revenue generated from these ads is tied to how long and how intensely they can keep users engaged. This represents a foundational misalignment between the interests of digital platforms and the general public that existing policy frameworks have not yet meaningfully addressed.

While the business model may seem natural and common-sense, it has insidious effects. Social media platforms offer the public ostensibly “free services” while in reality generating profits by selling users’ attention to advertisers, who pay a premium for access to audiences most likely to engage (Masoud, 2025). Under the current system, platforms are pursuing their rational best interest, as expected under a market system. However, legal scholar Tim Wu of Columbia Law argues that existing market regulation is fundamentally ill-suited to managing the attention economy because traditional law presumes price as a key variable, while in the attention economy, the commodity is attention itself. Harms may emerge from degraded agency and corrupted public discourse. 

The financial stakes of this model are massive, as in 2024, attention economy platforms controlled approximately 65% of total US digital advertising spending, creating powerful incentives to resist any regulation that would disrupt engagement-based revenue, as well as giving these platforms a massive potential to impact the general public (Jimenez, 2025).

The Opacity of Algorithmic Systems

A second policy failure is the near-total lack of transparency surrounding how platforms recommend content to different users. In practice, content recommendation algorithms function as a black box. Consumers aren’t transparently told how specific behavior patterns may produce certain results, or what trade-offs the system has made between content quality and predicted retention. As noted in analysis from the Yale School of Management, “consumers are fundamentally passive participants in the content recommendation process,” and given limited options to directly affect the content provided to them by the algorithm beyond simple options such as blocking specific channels (Holdheim, 2022). This opacity can produce concrete harms in many cases. Indeed, a Mozilla Foundation study found that 12.2 percent of videos recommended by YouTube’s algorithm violated the platform’s community guidelines (Holdheim, 2022). In other words, the platform was systematically providing users with content that it deemed inappropriate and/or harmful.

The legal architecture surrounding algorithmic opacity compounds the problem. Section 230 of the 1996 Communications Decency Act grants platforms immunity from hosted third-party content, and legal decisions have generally extended this immunity to shield corporations from liability for their algorithms. As analysis from Harvard’s Ash Center notes, the current debate surrounding reforming the regulations surrounding digital platforms is based on a “repeal and replace” paradigm, with agreement on the need for a solution but disagreement on how to balance accountability with the freedom of expression (Stanger et. al, 2025). Indeed, a 2024 bipartisan proposal to gradually repeal Section 230 saw significant pushback from corporations within the industry.

Additionally, the First Amendment is a more fundamental complication to algorithmic regulations. Platforms have argued that their algorithms constitute protected speech, and courts have generally accepted this framing. However, a March 2026 California jury verdict that held tech giants Meta and Google liable for the addictive design of their platforms and awarded both compensatory and punitive damages represents a meaningful departure, but remains an outlier rather than strong legal precedent (Keane, 2026). Legal experts that disagree with the First Amendment as a defense have also argued that algorithms are engineering choices about product design, not expression, and fall under consumer protection obligations (Keane, 2026). However, such lines of reasoning have not yet become the legal consensus.

The Individual Responsibility Narrative

The third structural failure is the tendency to place responsibility for the impacts of the attention economy and its platforms on users, rather than the corporations that design products intended to shape user behavior. In a study by the USC Annenberg Norman Lear Center  of 43 high-reach TV news channels across the US, UK, and France over a six-month period, keywords describing the systemic dimensions of social media harm  (“surveillance capitalism” and “attention economy”) had less than 50 combined mentions out of over 400,000 total keyword mentions recorded (Rosenthal et al., 2025). Rather, coverage most frequently focused on individual stories, most commonly of children. Moreover, only 5 percent of news articles included a personal story from someone negatively affected, while one-third quoted a company spokesperson (Rosenthal et al., 2025). This framing demonstrates a clear asymmetry and bias in favor of tech corporations.

This is significant in the context of policy because it shapes the public perception of regulations that seem viable. When digital harm is perceived to be a personal failing caused by individual choice, the policy responses will naturally default to individualized solutions such digital wellness education or limited parental control tools. Platforms such as Google and Meta have actively promoted this issue framing, highlighting voluntary age restrictions as evidence of responsible self-governance (Keane, 2026). While these measures are certainly beneficial, they are by no means a complete solution on their own. They fall short of systemic change, and ask individual users to defend their interests against systems designed to exploit human psychology.

The Regulatory Gap and its Consequences

The compounding result of the incentive problem, algorithmic opacity, and the narrative of individual responsibility is a regulatory environment that isn’t well-suited to regulate the system it is meant to govern. For instance, the Children’s Online Privacy Protection Act (COPPA), the primary federal framework for protecting children on digital platforms, was enacted in 1998 and designed around data collection from identifiable children under 13. It has many ambiguities and partially outdated clauses that tech companies can easily exploit. In FTC v. Amazon, the company retained children’s voice data for algorithmic training; in New Mexico ex rel. Balderas v. Google, the companies used schools as proxies for parental consent in order to collect student data without directly notifying parents, a type of practice COPPA was intended to restrict (Geronimi, 2024).

Similarly, a lot of existing digital policy was built for an era of the internet that no longer exists, which had fewer algorithms or psychological tools. The current era of the internet is instead one in which a few corporate actors hold control over what information is provided to the general population and what behaviors are reinforced, both through automated systems optimized for profit generation. As the R Street Institute observes, regulations of algorithmic systems remain largely directed towards the consumer and regulate the post-deployment stage of platforms. There are few meaningful mechanisms for proactive oversight of how the attention economy evolves and what impacts algorithm-driven platforms may have (Withrow & Weissman, 2024).

As will be elaborated upon in subsequent sections, the stakes of this policy problem are grave. 

‍C. Nonpartisan Reasoning

The goal shouldn’t be to ban social media or treat technology as automatically harmful. Instead, a more realistic approach is to try to make the digital environment less manipulative, more transparent, and much easier for users to control themselves.

The final goal should be platform accountability. However, it is important to do so without creating an unrealistic or overly broad regulatory system. Social media and digital platforms still provide many benefits, including communication, entertainment, business growth, education, and political expression. For that reason, policy should focus on the business practices and design choices that create proven, measurable harm, and not on controlling every single piece of online speech. 

V. Policy Options

A. Increase Transparency Requirements for Recommendation Algorithms

One of the first reforms should be better transparency requirements for recommendation algorithms. Platforms should be forced to show the main factors that influence recommendations, such as watch time, likes, searches, location data, past engagement, and user demographics. Bigger platforms could also be required to submit algorithmic impact reports and allow independent researchers access to anonymized platform data.

B. Strengthen Digital Consumer Protection Laws

Digital consumer protection laws need to be updated for today’s version of the internet. A better solution would treat certain platform practices as consumer protection issues when they are designed to take advantage of the behavior of their users. This could include much clearer rules and guidelines when it comes to autoplay, infinite scroll, streaks, constant push notifications, and default recommendation feeds.

C. Expand User Control Over Platform Settings

Policymakers could require major platforms to provide more simple controls for notifications, recommendations, and data collection. Users should be able to turn off personalized recommendations, switch to a chronological feed, disable autoplay, limit push notifications, and opt out of targeted advertising if desired without having to search through multiple settings pages.

D. Introduce Stronger Protections for Minors and Young Adults Online

The brief should support stronger protections for minors and young adults because these groups are most vulnerable to engagement driven design. A stronger framework would be to create higher privacy and design standards for users under the age of 18, and possibly extra protections for users under the age of 21 when it comes to targeted advertising.

E. Promote Digital Literacy and Awareness Education

Digital literacy education should be promoted, but this should not be thought of as the only solution. Schools should teach students how the attention economy works in the same basic way they teach financial literacy or media literacy. Students should understand that free platforms are usually funded by advertising and that algorithms are designed to interpret behavior to maximize engagement and profit.

F. Encourage Platform Accountability While Balancing Innovation and Free Expression

The final goal should be platform accountability without creating an unrealistic, unenforceable or overly broad regulatory system. Policy should focus on the business practices and design choices that create proven, measurable harm, and not on controlling every single piece of online speech. The strongest approach is therefore a balanced one.

VI. Impact on Young People

The brief also supports stronger protections for minors and young adults because these groups are most vulnerable to engagement driven design. The law currently treats the main issue as children under the age of 13, but the attention economy affects teenagers and young adults too. A stronger framework would be to create higher privacy and design standards for users under the age of 18, and possibly extra protections for users under the age of 21 when it comes to targeted advertising.

Students should understand that free platforms are usually funded by advertising and that algorithms are designed to interpret behavior to maximize engagement and profit. This would help students see social media for what it is truly instead of just a personal habit.

A useful digital literacy curriculum would be extremely helpful. It could teach students how to identify targeted advertising, how recommendation feeds can shape what they see, how influencers and platforms profit from attention, and how they can adjust privacy and notification settings themselves. This type of education would not solve the whole problem, though, as it would mainly only make users less passive inside the system. It would also fit with the larger goal of making young people prepared to make better decisions in a digital economy where their time, data, and attention all have economic value.

VII. Conclusions

The attention economy has become a defining feature of the modern digital marketplace, transforming human attention into a monetizable asset. Digital platforms offer new ways for individuals to communicate with one another, entertain themselves, access educational content, and grow their businesses. However, because the primary objective of digital platform business models is to maximize users’ engagement (i.e., to keep them using the platform), they often incentivize behaviors that prioritize user retention above all else.

Existing policy responses have focused primarily on privacy protections, parental controls, and age-based restrictions, yet these approaches do little to alter the financial and behavioral incentives that govern digital platforms. As algorithmic recommendation systems become increasingly influential in shaping how individuals choose what information they consume, and how they allocate their time, issues related to transparency, accountability and individual autonomy will continue to escalate.

Rather than treating technology as inherently harmful, policymakers can focus on achieving balanced reforms that foster transparency about platform behavior; strengthen consumer protections; give consumers choice when selecting digital products/services; and enhance users’ ability to understand how best to make informed decisions in the digital space. By aligning platform incentives more closely with the public interest, policymakers can help foster a digital marketplace that promotes innovative development while at the same time reducing the consequences associated with the "attention economy," particularly for younger generations.

VIII. Acknowledgement

The Institute for Youth in Policy wishes to acknowledge Andrew Baum for editing this policy brief.

IX. References

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