The Impact of the General Data Protection Regulation on Internet Interconnection

2021. Telecommunications Policy 45 (2).

58 Pages Posted: 6 Jan 2021

See all articles by Ran Zhuo

Ran Zhuo

Harvard University - Department of Economics

Bradley Huffaker

University of California, San Diego (UCSD) - The Center for Applied Internet Data Analysis (CAIDA)

KC Claffy

University of California, San Diego (UCSD)

Shane Greenstein

Harvard University

Multiple version iconThere are 2 versions of this paper

Date Written: December 2020

Abstract

The Internet comprises thousands of independently operated networks, interconnected using bi-laterally 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 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

JEL Classification: L86,L00,L51

Suggested Citation

Zhuo, Ran and Huffaker, Bradley and Claffy, KC C. and Greenstein, Shane, The Impact of the General Data Protection Regulation on Internet Interconnection (December 2020). 2021. Telecommunications Policy 45 (2)., Available at SSRN: https://ssrn.com/abstract=3761288 or http://dx.doi.org/10.2139/ssrn.3761288

Ran Zhuo (Contact Author)

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

Bradley Huffaker

University of California, San Diego (UCSD) - The Center for Applied Internet Data Analysis (CAIDA) ( email )

9500 Gilman Dr
Mail Stop 0505
La Jolla, CA 92093-0505
United States

KC C. Claffy

University of California, San Diego (UCSD) ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

Shane Greenstein

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

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