Privacy & Market Concentration: Intended & Unintended Consequences of the GDPR

46 Pages Posted: 15 Nov 2019 Last revised: 9 Jul 2020

See all articles by Garrett Johnson

Garrett Johnson

Questrom School of Business

Scott Shriver

University of Colorado at Boulder - Department of Marketing

Samuel Goldberg

Kellogg School of Management, Northwestern University

Date Written: July 8, 2020

Abstract

We show that the European Union's General Data Protection Regulation (GDPR) reduced data sharing online, but had the unintended consequence of increasing market concentration among technology vendors that provide support services to websites. We collect panel data on the web technology vendors selected by more than 27,000 top websites internationally. The week after the GDPR's enforcement, website use of web technology vendors for EU users falls by 15%. Websites that would face greater penalties under the GDPR drop more vendors. Websites are more likely to drop smaller vendors, which increases the relative concentration of the vendor market by 17%. Increased concentration predominantly arises among vendors that use personal data such as cookies, and from the increased relative shares of Facebook and Google-owned vendors, but not from website consent requests. This suggests that increases in concentration are driven by website vendor choices rather than changes in user behavior.

Keywords: Privacy, GDPR, Competition, Web Technology, Regulatory compliance

JEL Classification: D04, K21, L11, L22, L51, L86, M30, M38, O38

Suggested Citation

Johnson, Garrett and Shriver, Scott and Goldberg, Samuel, Privacy & Market Concentration: Intended & Unintended Consequences of the GDPR (July 8, 2020). Available at SSRN: https://ssrn.com/abstract=3477686 or http://dx.doi.org/10.2139/ssrn.3477686

Garrett Johnson (Contact Author)

Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States
6173534677 (Phone)

HOME PAGE: http://www.bu.edu/questrom/faculty-research/faculty-directory/garrett-johnson/

Scott Shriver

University of Colorado at Boulder - Department of Marketing ( email )

995 Regent Dr
Boulder, CO 80309
United States

HOME PAGE: http://https://www.colorado.edu/business/scott-shriver

Samuel Goldberg

Kellogg School of Management, Northwestern University ( email )

Kellogg School of Management
2001 Sheridan Rd.
Evanston, IL 60208
United States

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