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

Author

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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    Cited by:

    1. Zhengrong Gu & Garrett A. Johnson & Shunto J. Kobayashi, 2025. "Can Privacy Technologies Replace Cookies? Ad Revenue in a Field Experiment," CESifo Working Paper Series 11931, CESifo.
    2. Ruizhi Zhu & Sridhar Moorthy & Xianwen Shi, 2025. "Advertising Platforms and Privacy," Marketing Science, INFORMS, vol. 44(6), pages 1381-1406, November.
    3. Jean-Pierre Dubé & John G. Lynch & Dirk Bergemann & Mert Demirer & Avi Goldfarb & Garrett Johnson & Anja Lambrecht & Tesary Lin & Anna Tuchman & Catherine Tucker, 2025. "Frontiers: The Intended and Unintended Consequences of Privacy Regulation for Consumer Marketing," Marketing Science, INFORMS, vol. 44(5), pages 975-984, September.

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