Is GDPR unfair to smaller publishers?
17th of April 2019
Since the rolling-out of GDPR, some websites have been stopped serving content to visitors from EU. As a result, an argument have been made that GDPR penalize smaller publishers due to the cost of being compliant. This article provides a simple model for answering if that’s really the case.
Does GDPR create an unfair advantage for larger publishers (or platforms)?
The very short answer is that it does not. The most apparent advantage is related with how dependent a given publisher or platform is with people’s data in the first place. An actor whose business model is not dependent on people’s data has an advantage over anyone else. As the dependency increases, the advantage decreases.
Generally size is associated with available resources, but it’s not strictly the case. Sometimes bigger players are poorly resourced, but an early startup may be very well resourced. As dependency on people’s data increase, the required resources to comply with GDPR also increase.
Out of these two – resources and depedency – dependency (on people’s data) is more prominent. This means that when the depedency is low enough, compliance has negligible cost and is therefore equally feasible regardless of resources. On the other hand, at a certain level of resources even the most dependent (and therefore complex) models are feasible. Consequently, it follows that there are scenarios where poorly resourced actors are at disadvantage in terms of the most complex (most depedent) models.
What can poorly resourced players do?
By far the simplest strategy is to reduce dependency on people’s data, and instead innovate around contextual and other under-leveraged data surfaces.
What can advertisers do?
Advertisers have an important role to play here. The more advertisers are willing to support players that focus on innovation in contextual advertising and other under-leveraged opportunities which reduce dependency on people’s data, the more there will be such options available in the market place. It’s very important to keep in mind that there is no scientific evidence to support economic viability (in comparison to meaningful options) of advertising models that depend on people’s data.