The Impact of the General Data Protection Regulation (GDPR) on Online Tracking

Abstract

This study explores the impact of the General Data Protection Regulation (GDPR), introduced on May 25th, 2018, on online trackers—vital elements in the online advertising ecosystem. Using a difference-in-differences approach with a balanced panel of 294 publishers, we compare publishers subject to the GDPR with those unaffected (the control group). Drawing on data from WhoTracks.me, which spans 32 months from May 2017 to December 2019, we analyze how the number of trackers used by publishers changed before and after the GDPR. The findings reveal that although online tracking increased for both groups, the rise was less significant for EU-based publishers subject to the GDPR. Specifically, the GDPR reduced about four trackers per publisher, equating to a 14.79% decrease compared to the control group. The GDPR was particularly effective in curbing privacy-invasive trackers that collect and share personal data, thereby strengthening user privacy. However, it had a limited impact on advertising trackers and only slightly reduced the presence of analytics trackers. 

Keywords: Economics of Privacy, Online Privacy, Online Tracking, Privacy Law, Quasi-Experiment, Difference-in-Differences, Synethic Control

JEL Classification: M31, M37, M38