The Impact of Privacy Laws on Online User Behavior

Julia Schmitt, Klaus Miller and Bernd Skiera
Additional contact information
Julia Schmitt: Goethe University Frankfurt
Klaus Miller: HEC Paris - Ecole des Hautes Etudes Commerciales

Working Papers from HAL

Abstract: Policymakers worldwide draft privacy laws that require trading-off between safeguarding consumer privacy and preventing economic loss to companies that use consumer data. However, little empirical knowledge exists as to how privacy laws affect companies' performance. Accordingly, this paper empirically quantifies the effects of the enforcement of the EU's General Data Protection Regulation (GDPR) on online user behavior over time, analyzing data from 6,286 websites spanning 24 industries during the 10 months before and 18 months after the GDPR's enforcement in 2018. A panel differences estimator, with a synthetic control group approach, isolates the short- and long-term effects of the GDPR on user behavior. The results show that, on average, the GDPR's effects on user quantity and usage intensity are negative; e.g., the numbers of total visits to a website decrease by 4.9% and 10% due to GDPR in respectively the short- and long-term. These effects could translate into average revenue losses of $7 million for e-commerce websites and almost $2.5 million for ad-based websites 18 months after GDPR. The GDPR's effects vary across websites, with some industries even benefiting from it; moreover, more-popular websites suffer less, suggesting that the GDPR increased market concentration.

Keywords: Privacy Law; Online Privacy; Consumer Protection; GDPR; Data Privacy Regulation (search for similar items in EconPapers)
Date: 2021-10-10
References: Add references at CitEc
Citations: View citations in EconPapers (2)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: The Impact of Privacy Laws on Online User Behavior (2021)
Working Paper: The Impact of Privacy Laws on Online User Behavior (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-03857505

DOI: 10.2139/ssrn.3774110

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().