Paying for Privacy: Pay-or-Tracking Walls

Timo Müller-Tribbensee (), Klaus M. Miller () and Bernd Skiera
Additional contact information
Timo Müller-Tribbensee: Goethe University Frankfurt
Klaus M. Miller: HEC Paris

No 1514, HEC Research Papers Series from HEC Paris

Abstract: Prestigious news publishers, and more recently, Meta, have begun to request that users pay for privacy. Specifically, users receive a notification banner, referred to as a pay-or-tracking wall, that requires them to (i) pay money to avoid being tracked or (ii) consent to being tracked. These walls have invited concerns that privacy might become a luxury. However, little is known about pay-or-tracking walls, which prevents a meaningful discussion about their appropriateness. This paper conducts several empirical studies and finds that top EU publishers use pay-or-tracking walls. Their implementations involve various approaches, including bundling the pay option with advertising-free access or additional content. The price for not being tracked exceeds the advertising revenue that publishers generate from a user who consents to being tracked. Notably, publishers’ traffic does not decline when implementing a pay-or-tracking wall and most users consent to being tracked; only a few users pay. In short, pay-or-tracking walls seem to provide the means for expanding the practice of tracking. Publishers profit from pay-or-tracking walls and may observe a revenue increase of 16.4% due to tracking more users than under a cookie consent banner.

Keywords: rivacy; tracking; consent; behavioral targeting; online advertising (search for similar items in EconPapers)
JEL-codes: D12 D83 L86 M31 M38 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2024-04-04
New Economics Papers: this item is included in nep-pay
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https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4749217 Full text (text/html)

Related works:
Working Paper: Paying for Privacy: Pay-or-Tracking Walls (2024)
Working Paper: Paying for Privacy: Pay-or-Tracking Walls (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1514

DOI: 10.2139/ssrn.4749217

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