The Economic Cost of Internet Shutdowns

Why governments sometimes cut internet access, how often it happens, and the costs to businesses, students and citizens.

Governments sometimes deliberately cut internet access in a region or country, usually citing security, public order or preventing the spread of rumours, or during exams to prevent cheating. These are called internet shutdowns.

How common they are

The digital rights organisation Access Now tracks shutdowns worldwide. Its reports have found hundreds of shutdowns each year globally. India recorded the highest number of shutdowns in the world for several consecutive years, though Myanmar and other countries also imposed many shutdowns. The longest shutdown in India was in Jammu and Kashmir from August 2019, with 4G mobile internet restored only in February 2021.

Economic costs

Shutdowns disrupt:

Businesses: e-commerce, digital payments, logistics and services that depend on connectivity.
Workers: freelancers and remote workers lose income.
Students: online learning and exam applications.
Health care: telemedicine and coordination.
Banking: digital payments and ATMs.
Tourism and investment confidence.

Estimates by organisations such as Top10VPN and others have put global economic losses from shutdowns in billions of dollars a year.

Legal limits

In January 2020, India’s Supreme Court ruled in Anuradha Bhasin v. Union of India that indefinite internet suspension is not permissible, that shutdowns must be necessary and proportionate, and that orders must be published and reviewed.

The debate

Governments argue shutdowns can prevent violence fuelled by rumours on social media. Critics argue that shutdowns are blunt tools with large economic and human rights costs, that evidence of their effectiveness in preventing violence is limited, and that more targeted measures are available.

A shutdown in a market town

Authorities suspend mobile internet in a district for a week during unrest. Shops that accept UPI payments cannot process sales, delivery workers cannot receive orders, and students cannot submit online applications. Local businesses lose a week of income. The costs fall on many people unconnected to the unrest.

Thinking shutdowns only affect social media

Shutdowns cut access to payments, banking, education, health services and work. Their economic costs reach far beyond social media use.

Key takeaways

Internet shutdowns are deliberate cuts to access, often citing security.
India recorded the most shutdowns globally for several years.
Shutdowns disrupt businesses, payments, education, health care and work.
India's Supreme Court ruled in 2020 that shutdowns must be necessary, proportionate and reviewed.