GDPR: One year in
There are two ways to look at GDPR: either as protecting people’s privacy or giving companies a legally-defined way to collect and process data.
If your birthday happens to fall on the 25th of May, you’re more than just a Gemini. You share your birthday with a very important event. No, it’s not some rare comet sighting or the birthday of some historical figure. It was the day back in 2018 that the General Data Protection Regulation (GDPR) was officially implemented, a major set of rules set by the European Commission intended to give people more control over their personal data, and it recently turned one.
There are two ways to look at GDPR: either as protecting people’s privacy or giving companies a legally-defined way to collect and process data. Either way, it’s interesting to see what kind of effect it’s had on the world’s biggest players. In this Vestle UK article, we’ll have a look at the markets GDPR affected most and how it could show up on the world’s financial radar.
GDPR and Ecommerce
One of the biggest sectors to be affected by GDPR was ecommerce. According to Ecommerce News, there are over 800,000 online stores in Europe.* Some, like Amazon, are vast and far-reaching in terms of their offerings, while others stick to selling only one item, like Henry J Socks. Other than offering goods in exchange for money, all 800,000+ stores also share the core motive of making the most of every sale any way they can. Typically, they do this by using customer data such as shopping habits, age and location to generate specific adverts targeted to these characteristics. GDPR essentially curbs the means by which these companies could obtain and use such information by making them lay all their cards out on the table – sans typical marketing speak – for every potential shopper to review and accept before being able to shop.
Did GDPR regulations turn people away?
For those who remember how, back in the day, you’d walk into a store and be greeted by the nostalgic ring of a bell, it was like facing a giant sign that says “We’re gonna hold onto your info and use it to help you buy more stuff unless you tell us not to.” It’s not altogether unfriendly, but it’s also not a cute bell.
This could be a problem for those who shop online thinking there’s some smiling shop assistant at the other end of the site rather than some multibillion-dollar company whose goal is to maximise your sale by exploiting your info into a massive barrage of relevant adverts. So met with such pared down, if not brutal language may have been a turn off for some, but in terms of whether or not GDPR measures affected people’s shopping habits to the point of actual financial losses is still unclear.
GDPR and economics
There are plenty of other places GDPR’s effects are showing up beyond ecommerce. According to Engadget, within two months of the implementation of GDPR Facebook lost 1 million active users in Europe. But considering the global reach of Facebook hits 2.2 billion users, of which 376 million are in Europe, it’s a million the tech giant can easily overlook.**
Those with an eye on the finance industry, might find themselves wondering if GDPR is affecting the financial markets. Again, most evidence is not conclusive, but if – in line with the markets theme – we envisage GDPR as a big sleeping bear, and wonder what would happen if you poked it with a stick, we’d find the retaliation is definitely something worth noting. Point being: if you violate GDPR rules, you can face record-setting consequences.
Like British Airways did in early July, 2019, after a data breach that compromised roughly 380,000 customer payment cards got the airline’s parent company International Airlines Group slapped with a record £183,000 fine, closing the FTSE 100 down 3.87 points to 7,549.27 on 8th July, according to This is Money.*** Could the fine against IAG, which is one of the FTSE 100 constituents, have caused such market volatility that day? There’s no way to be sure, but according to Tech Crunch, IAG is still experiencing volatility, with shares down 1.5% as of mid-July.****
If you’re a market watcher, get the popcorn ready because according to recent news, it seems British Airways might only be the beginning. The Financial Times reported that since the start of 2019, several tech giants including Netflix, Amazon, YouTube, Apple and Spotify have been found in breach of GDPR regulations in a complaint filed with the Austrian Data Protection Authority. Investigations are still pending and as of yet, no fines have been issued.
The bottom line
Still, just one year into the age of GDPR, so many questions remain as to its effectiveness and overall impact. If financial concerns like these catch your fancy, it’s worth staying informed any way you can. Read the news, gather the facts, and tune into a variety of financial sites that offer market info on the companies you’re most interested in.
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