Study on the economic impact of the ePrivacy Regulation on online advertising and ad-based digital business models

The amendment of the European ePrivacy Directive on the protection of privacy and confidentiality in electronic communications is currently subject of a controversial debate. Privacy-friendly preferences and configurations for software such as web browsers and apps (Privacy by Default / Design) are designed to provide a higher level of protection. It is believed that significantly fewer consumers will consent to the provision of targeted online advertising through cookies based on the new ePrivacy Regulation. This is a major fear of the digital economy in general and the online advertising industry in particular. They see established ad-based digital business models at risk.

According to the results of a study commissioned by the German Ministry for Economic Affairs and Energy, these fears are to be taken seriously: In Germany, a reduction of the total digital advertising budget of about one third is to be expected in the short term. In the medium to long term, it can be expected that the advertising budgets will migrate to closed systems and, alternatively, paywalls will be established. The study shows that elementary trade-offs in a highly complex and interdependent Internet ecosystem must be understood before appropriate policy decisions are made.

Download the study and a power point presentation here.

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