Economic Damage of Cookie Lifetime Restrictions

Abstract

Over the past few years, regulators have begun to consider restricting a cookie's lifetime or even banning cookies altogether as a way to protect consumer privacy. Most of this debate has taken place in the absence of any quantified cost-benefit analysis. To begin to fill this gap in the discourse, we estimate the potential economic damage of lifespan restrictions on cookies. Our analysis is based on an empirical study on cookies of 54,127 users who received about 130 million ad impressions over 2.5 years. Only 22% of all cookies increase their daily value over time but the value of that quantile represent 61% of the value of all cookies. This analysis suggests that restricting their lifetime to one year as the European Union proposes (two years as Google advocates) decreases cookie lifetime value by 14.8% (5.9%), which represents a decrease in the value of all cookies of about 7.4% (1.3%). Overall, we find that the average lifetime of a cookie is 215 days (median 68 days) and the average value of a cookie is €1.43 (median €.02).

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