Evaluating the Impact of Privacy Regulation on E-Commerce Firms: Evidence from Apple’s App Tracking Transparency

Guy Aridor, Yeon-Koo Che, Brett Hollenbeck, Maximilian Kaiser and Daniel McCarthy

No 10928, CESifo Working Paper Series from CESifo

Abstract: Assembling novel datasets on online advertiser spending, performance, and revenue, we quantify the economic effects of Apple’s App Tracking Transparency (ATT) privacy policy on e-commerce firms. We find that conversion-optimized Meta advertisements, affected most by ATT, saw a 37% reduction in click-through rates after ATT. While firms responded by shifting ad spend from Meta to the Google ecosystem, firms with higher baseline Meta dependence nevertheless experienced a 37% decline in firm-wide revenue relative to firms with lower baseline Meta dependence. These declines were primarily borne by smaller e-commerce firms, raising questions about the trade-offs between consumer privacy and the ability of smaller e-commerce and direct-to-consumer firms to succeed in the product market.

Keywords: privacy regulation; online advertising; e-commerce (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-pay and nep-reg
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