Does Privacy Regulation Harm Content Providers? A Longitudinal Analysis of the Impact of the GDPR

While the European General Data Protection Regulation (GDPR) has received significant attention in economic research, concerns that it would adversely affect websites' ability to provide quality content to their visitors have not been thoroughly investigated. We construct a longitudinal data-set of news and media websites to study how online content providers adapted their responses to the GDPR over time, and whether restrictions on online tracking enforced by the regulation affected downstream outcomes such as the quantity of content those websites offer to their visitors and visitors' engagement with such content. We find robust evidence of websites' reactions to the GDPR in both the US and the EU, including an initial reduction in the number of third-party cookies and intensity of visitor tracking. However, reactions differ between US and EU websites, and several months after the enactment of the regulation the initial reduction in tracking is reversed, as tracking among EU websites bounces back. We use difference-in-differences, LATE, and look-ahead matching models to assess downstream effects of the regulation, capturing both ecosystem effects and website-level effects. We find a small reduction in average page views per visitor on EU websites relative to US websites near the end of the period of observation, but no statistically significant impact of the regulation on EU websites' provision of new content, social media engagement with new content, and ranking in both the short-term and the long-term. We also find no evidence of differences in survival rates across EU and US content providers, and no evidence that monetization strategies change at a higher rate for EU websites relative to US websites. While industry predictions forebode dire consequences arising from the GDPR for content providers, we find that websites that responded more strongly to the GDPR were those less likely to be affected by such a response; in contrast, websites that relied in great part on EU visitors found, over time, ways to avoid being negatively affected by the regulation