The impact of the General Data Protection Regulation on internet interconnection

Ran Zhuo, Bradley Huffaker, Kc Claffy and Shane Greenstein

Telecommunications Policy, 2021, vol. 45, issue 2

Abstract: The Internet comprises thousands of independently operated networks, interconnected using bi-laterally negotiated data exchange agreements. The European Union (EU)'s General Data Pro-tection Regulation (GDPR) imposes strict restrictions on handling of personal data of European Economic Area (EEA) residents. A close examination of the text of the law suggests signifi-cant cost to application firms. Available empirical evidence confirms reduction in data usage in the EEA relative to other markets. We investigate whether this decline in derived demand for data exchange impacts EEA networks' decisions to interconnect relative to those of non-EEA OECD networks. Our data consists of a large sample of interconnection agreements between networks globally in 2015–2019. All evidence estimates zero effects: the number of observed agreements, the inferred agreement types, and the number of observed IP-address-level inter-connection points per agreement. We also find economically small effects of the GDPR on the entry and the observed number of customers of networks. We conclude there is no visible short run effects of the GDPR on these measures at the internet layer.

Keywords: GDPR; Internet; Digital infrastructure; Networking; Interconnection (search for similar items in EconPapers)
JEL-codes: L00 L51 L86 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Working Paper: The Impact of the General Data Protection Regulation on Internet Interconnection (2019)
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DOI: 10.1016/j.telpol.2020.102083

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