Europe has led the world in protecting consumers’ privacy. E-commerce companies catering to European customers had to comply with the European General Data Protection Regulation starting in May of 2018. Now, many states in the U.S. are adopting similar legislation. California’s Privacy Rights Act and Virginia’s Consumer Data Protection Act went into effect on January 1, 2023, while the Colorado and Connecticut Privacy Acts will become operative on July 1, 2023.
E-commerce companies have relied heavily on these highly interdependent technologies to make sure their websites ran efficiently. The problem is that these very interdependencies are an obstacle on the path toward compliance. Their efficiency has become a liability. That raises an interesting paradox.
Unfortunately, tech firms that provide the software often struggle to ensure their own compliance and focus on optimizing their own performance during this transition, possibly at the expense of their users’ performance. For example, an EU-based firm that used YouTube and WordPress may have adopted Google Analytics to track its customers’ activity. The three components are interdependent, so that the firm faced more complex and costly adaptation to GDPR.
Our findings help address a larger set of questions at the heart of digital transformation.
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