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Economic Consequences of Restrictions on the Usage of Cookies

Project description

A closer look at the EU's new cookie rules

Cookies – small text files that websites place on your device as you are browsing – are processed and stored by your web browser. They can provide businesses with insights into their users' online activity. Due to the amount of data cookies can contain, EU policies restrict their use. The regulations governing cookies are split between the GDPR and the ePrivacy Directive. There is no way to know for sure if these are having the intended positive consequences for user privacy. The EU-funded COOKIES project will eliminate the knowledge gap. It will analyse a massive set of 'cookie data' and collect 'implementation data'. The findings will provide a crucial empirical foundation for cookie restrictions in the EU.

Objective

Cookies (or HTTP cookies) enable companies to collect and exchange extensive information about users. This information is often used to improve the performance of online advertising, which website publishers rely on in order to finance the free content to which their users have become accustomed. Yet, the collection of information leads to a loss of privacy. Accordingly, EU policy makers have put forward initiatives to restrict cookie usage (e.g. General Data Protection Regulation (GDPR), upcoming EU ePrivacy Regulation).

So far, there exists very little empirical knowledge on the trade-off between user privacy and the economic value that website publishers, advertisers, and even users derive from cookies. As a result, policy makers have no way of telling whether their restrictions on cookies have the intended positive consequences for user privacy, or whether any benefits are outweighed by negative effects on the profits of companieswhich policy makers also seek to nurture.

This proposals vision is to eliminate the gap in knowledge regarding the economic consequences of restrictions on the usage of cookies. I propose four work packages, each outlining the economic consequences of a specific type of restriction. In WP1-3, I will analyze a proprietary and massive (60-65 TB) set of cookie data that includes 472 publishers, 842 advertisers, 2.8 billion cookies and the prices of >110 billion ad impressions, that indicate the value of cookies for companies. In WP4, I collect implementation data to analyze the steps taken by thousands of the worlds most highly-trafficked websites to become GDPR-compliant.

My results will provide a crucial empirical foundation for cookie restrictions in an industry worth more than 10 billion per year in the EU. The required interdisciplinary research will also involve the development of novel methodologies for deriving such information from big data, and theories as to why the observed economic consequences occur.

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Funding Scheme

ERC-ADG - Advanced Grant

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Call for proposal

(opens in new window) ERC-2018-ADG

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Host institution

JOHANN WOLFGANG GOETHE-UNIVERSITAET FRANKFURT AM MAIN
Net EU contribution
€ 1 998 250,00
Address
THEODOR W ADORNO PLATZ 1
60323 Frankfurt Am Main
Germany
Region
Hessen Darmstadt Frankfurt am Main, Kreisfreie Stadt
Activity type
Higher or Secondary Education Establishments
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Total cost
€ 1 998 250,00

Beneficiaries (1)