Regulatory Compliance with Limited Enforceability: Evidence from Privacy Policies

Bernhard Ganglmair (), Julia Krämer () and Jacopo Gambato ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: We study how asymmetric enforceability of regulatory rules affects firms’ compliance using a simple inspection model and a large sample of German privacy policies. We exploit the introduction of the General Data Protection Regulation, compelling firms to disclose, in accessible language, details of their data use. The specifics of disclosure are objective, whereas readability is subjective and difficult to enforce. We show that firms increased disclosure, but the policy readability did not improve. In line with theory, firms anticipating regulatory scrutiny and those facing higher-budget data protection authorities demonstrated a stronger response in readability compliance without sizeable effects on disclosure.

Keywords: data protection; GDPR; information disclosure; privacy policies; regulation; text-asdata; transparency (search for similar items in EconPapers)
JEL-codes: D22 K20 L51 (search for similar items in EconPapers)
Pages: 69
Date: 2024-05, Revised 2024-09
New Economics Papers: this item is included in nep-law and nep-reg
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Regulatory Compliance with Limited Enforceability: Evidence from Privacy Policies (2024)
Working Paper: Regulatory compliance with limited enforceability: Evidence from privacy policies (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2024_547v2

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