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Evaluating the Impact of Privacy Regulation on E-Commerce Firms: Evidence from Apple’s App Tracking Transparency

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Listed:
  • Guy Aridor
  • Yeon-Koo Che
  • Brett Hollenbeck
  • Maximilian Kaiser
  • Daniel McCarthy

Abstract

Assembling novel datasets on online advertiser spending, performance, and revenue, we quantify the economic effects of Apple’s App Tracking Transparency (ATT) privacy policy on e-commerce firms. We find that conversion-optimized Meta advertisements, affected most by ATT, saw a 37% reduction in click-through rates after ATT. While firms responded by shifting ad spend from Meta to the Google ecosystem, firms with higher baseline Meta dependence nevertheless experienced a 37% decline in firm-wide revenue relative to firms with lower baseline Meta dependence. These declines were primarily borne by smaller e-commerce firms, raising questions about the trade-offs between consumer privacy and the ability of smaller e-commerce and direct-to-consumer firms to succeed in the product market.

Suggested Citation

  • Guy Aridor & Yeon-Koo Che & Brett Hollenbeck & Maximilian Kaiser & Daniel McCarthy, 2024. "Evaluating the Impact of Privacy Regulation on E-Commerce Firms: Evidence from Apple’s App Tracking Transparency," CESifo Working Paper Series 10928, CESifo.
    • Handle: RePEc:ces:ceswps:_10928
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    References listed on IDEAS

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    Keywords

    privacy regulation; online advertising; e-commerce;
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