Youngsters are not prepared for what they are signing up to on the internet, and are frequently giving personal information away, according to the Children’s Commissioner for England.
Anne Longfield said children did not know how their data was being used due to "impenetrable" terms and conditions.
She said the internet was not designed for children even though they are now the biggest users.
She has called for a digital ombudsman to be created to uphold their rights.
Despite the internet being an "incredible force for good", Ms Longfield said children were being left to fend for themselves with parents hoping they would avoid its pitfalls.
How can I keep my kids safe online?
Her report also recommended that children should study "digital citizenship" to learn about their rights and responsibilities online and that social media companies should rewrite their terms and conditions in far simpler language.
Children already learn about using the internet and staying safe online at school as part of ICT but Ms Longfield wants to make this part of the curriculum from the age of four.
She said small print often contained "hidden clauses" waiving privacy rights and allowing content children posted to be sold on.
"Parents are always going to be on a losing battle which is why we need to take greater action to shift the balance of power towards children," she added.
"This is about helping children navigate this world, they have got all sorts of rights that we have signed up to in a physical world. It is now time to sign up to those in the digital world."