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Market commentary
My perspective on markets, the economy and events that matter to investors.
The Addiction Economy: Why We Should Exclude It from Our Portfolios
An ethical commentary based on research and primary sources. Review: 13 October 2026. Company reports cover 2025; WHO social-media data cover 2018 and 2022. The investment stance is the author's judgment.
Not every profitable business deserves a place in a portfolio. I believe we should exclude activities whose competitive advantage materially relies on exploiting customers' loss of control. High retention can indicate a good product, but does not by itself establish benefits for its users.
1. How is the addiction economy developing?
A problem familiar from tobacco and gambling is gaining digital scale. Smartphones provide continuous access, while personalisation, notifications and autoplay may sustain use. Experiments reported by Allcott, Gentzkow and Song in the American Economic Review (2022) show the importance of habit formation and self-control problems in social-media use. This does not mean every frequent user is addicted. [1]
WHO reported that the share of adolescents showing problematic social-media use rose from 7% in 2018 to 11% in 2022. These are HBSC survey results from Europe, central Asia and Canada. They indicate difficulties with control and negative consequences, not the prevalence of clinical diagnoses or proof that a particular platform caused the increase. [2]
2. Three listed-company examples
For Meta, the concern extends beyond an abstract criticism of screen time. On 10 July 2026, the European Commission presented preliminary findings that the addictive design of Facebook and Instagram breached the DSA, including infinite scroll and personalised recommendations. These are preliminary findings, not a final decision. [4]
Mechanisms and the strength of evidence differ across these businesses. Online communities can provide benefits, not every gambler develops gambling disorder, and frequent app use is not equivalent to nicotine addiction. These distinctions matter.
3. Why I do not want to profit from it
My position is ethical: investment returns should not obscure users' health, autonomy and financial security. WHO notes that gambling harm can include debt and reduced spending on basic needs, even below the clinical diagnostic threshold. [8] Transferring these costs to families or society does not make them less real.
There is also investment risk: regulation, litigation and required product changes could weaken profitability. This is a possible cost channel, not a certain forecast of falling share prices. However, my ethical exclusion does not depend on whether the shares prove profitable.
Buying shares in the secondary market normally transfers money to the previous owner, not directly to the company. It still means participating in its financial outcomes and ownership rights. Exclusion is therefore primarily a choice about which business models we want to benefit from; its influence on company behaviour depends on scale and shareholder action.
Before investing, I would ask one question: does the company gain by helping customers achieve their goals, or also when they can no longer stop? If the answer points to systematic exploitation of that vulnerability, it is worth choosing another source of profit.
Sources
Posts reflect the author’s personal views as of publication. They are not investment recommendations.