Iran’s Internet Blackouts Are Sabotaging Its Own Economy

As internet shutdowns, platform blocking, and content filtering become increasingly common levers for authoritarian control around the world, Iran has presented an especially dramatic case study on the economic impact and humanitarian toll of connectivity blackouts. 

In response to mass government opposition and protests, the Iranian regime launched an extensive shutdown in September that drastically limited all digital communication in the country. And Tehran has ongoing campaigns to slow connectivity and access to popular services, including Meta’s Instagram. Dragging out the disruptions, though, is beginning to reveal the true economic toll of the brutal technique, according to new assessments by the US Department of State.

Iran is already a heavily sanctioned and isolated nation, yet the government has repeatedly imposed broad digital restrictions and shutdowns, including notable initiatives in 2017 and 2019. The cumulative impact of these crackdowns has affected the rights of more than 80 million people living in Iran and disrupted every aspect of Iranian society, including commerce.

“This is another instance, an important one, in which the officials show how they consistently pick their own self-interest over the public interest,” says Reza Ghazinouri, a strategic adviser for the San Francisco–based human rights and civil liberties group United for Iran. “In the past years, millions of Iranians have fallen below the poverty line, and further limiting access to platforms like Instagram just adds many more to that number. And this disproportionately impacts women. Sixty-four percent of Iranian businesses on Instagram are women-owned.”

From communicating with customers to processing transactions, businesses rely on digital platforms in different ways, but digital disruptions have an impact on businesses of all sizes. Multiple Iranian trade associations have said in recent weeks that their member companies are reporting major losses. And some reports have found that the recent outage affected hundreds of thousands of small businesses. 

“This censorship underscores the degree to which Iran’s leadership fears what is possible when its people can freely communicate with one another and the outside world,” Rob Malley, US special envoy for Iran, told WIRED in written remarks.

The protest movement in Iran has gained momentum since 22-year-old Mahsa Amini died in the custody of Iran’s “morality police” while being held for allegedly breaking rules about wearing hijab. Since September, more than 18,000 people have been detained by Iranian law enforcement related to the demonstrations, and nearly 500 people, including nearly 60 children, have been killed at the protests as officials exert increasingly draconian force on demonstrators. 

Analysis of the recent shutdown by a consortium of digital rights groups, published at the end of November and cited by the State Department, showed that the Iranian government has been deploying an increasingly broad set of technical capabilities to make it more difficult for the population to circumvent digital restrictions. For example, the government has broadened its ability to block encrypted connections to defeat users’ efforts to conceal their web browsing. Officials have also continued to expand their blocks on the Google Play Store, Apple’s App Store, and browser extension stores, making it harder for Iranians to download circumvention tools. The findings also indicate that there is a cumulative impact and increasing effectiveness over time as the government stacks censorship, content filtering, and blocking with intermittent and large-scale outages.

It is difficult to gauge the exact economic impact of the digital blackouts and disentangle it from other factors like international sanctions. Based on the escalating internet shutdown tactics and tolerance for self-inflicted damage, though, the State Department believes that the Iranian regime feels more threatened by the recent protest movement than previous public waves of opposition. 

Earlier this month, in a high-profile concession to protesters, the Iranian government said it had shut down the “morality police” that enforced restrictive laws, particularly a rigid Islamic dress code for women. The laws are still in place, though, and it is unclear how much the move will actually impact enforcement in practice.

A State Department spokesperson told WIRED in a statement that the White House is “committed to helping the Iranian people exercise their universal right to freedom of expression and to freely access information via the internet.”