The Impact of the General Data Protection Regulation on Internet Interconnection

Ran Zhuo, Bradley Huffaker, Claffy Kc and Shane Greenstein

No 26481, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The Internet comprises thousands of independently operated networks, interconnected using bilaterally negotiated data exchange agreements. The European Union (EU)’s General Data Protection 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 significant 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 investment in interconnection by networks in the EEA relative to networks in non-EEA OECD countries. Our data consists of a large sample of interconnection agreements between networks globally in 2015–2019. All evidence estimates precisely zero effects: the number of observed agreements, the inferred agreement types, and the number of observed IP-address-level interconnection 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 consequence of the GDPR at the internet layer.

JEL-codes: L00 L51 L86 (search for similar items in EconPapers)
Date: 2019-11
New Economics Papers: this item is included in nep-eec, nep-ict, nep-pay and nep-reg
Note: IO PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published as Ran Zhuo & Bradley Huffaker & kc claffy & Shane Greenstein, 2021. "The impact of the General Data Protection Regulation on internet interconnection," Telecommunications Policy, vol 45(2).

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Journal Article: The impact of the General Data Protection Regulation on internet interconnection (2021)
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