The Impact of Privacy Regulation on Web Traffic: Evidence From the GDPR

44 Pages Posted: 9 Feb 2022

See all articles by Raffaele Congiu

Raffaele Congiu

affiliation not provided to SSRN

Lorien Sabatino

Department of Management and Production Engineering, Politecnico di Torino

Geza Sapi

European Commission, DG Competition, Chief Economist's Team; Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE)

Date Written: February 3, 2022

Abstract

We use traffic data from around 5,000 web domains in Europe and United States to investigate the effect of the European Union’s General Data Protection Regulation (GDPR) on website visits and user behaviour. We document an overall traffic reduction of approximately 15% in the long-run and find a measurable reduction of engagement with websites. Traffic from direct visits, organic search, email marketing, social media links, display ads, and referrals dropped significantly, but paid search traffic - mainly Google search ads - was barely affected. We observe an inverted U-shaped relationship between website size and change in visits due to privacy regulation: the smallest and largest websites lost visitors, while medium ones were less affected. Our results are consistent with the view that users care about privacy and may defer visits in response to website data handling policies. Privacy regulation can impact market structure and may increase dependence on large advertising service providers. Enforcement matters as well: The effects were amplified considerably in the long-run, following the first significant fine issued eight months after the entry into force of the GDPR.

Keywords: Privacy regulation, GDPR, Website traffic, Marketing channels, Firm size

JEL Classification: D43, D8, L13, L15, L5

Suggested Citation

Congiu, Raffaele and Sabatino, Lorien and Sapi, Geza, The Impact of Privacy Regulation on Web Traffic: Evidence From the GDPR (February 3, 2022). Available at SSRN: https://ssrn.com/abstract=4025033 or http://dx.doi.org/10.2139/ssrn.4025033

Raffaele Congiu

affiliation not provided to SSRN

Lorien Sabatino (Contact Author)

Department of Management and Production Engineering, Politecnico di Torino ( email )

Corso Duca degli Abruzzi, 24
Torino, Torino 10129
Italy

Geza Sapi

European Commission, DG Competition, Chief Economist's Team ( email )

Place Madou, Madouplein 1
Saint-Josse-ten-Noode/Sint-Joost-ten-Noode
Brussels, B-1049
Belgium

Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE) ( email )

Universitaetsstr. 1
Duesseldorf, NRW 40225
Germany

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