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GDPR: The New European Data Rules And Why They Matter For Ad, E-Commerce Players

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GDPR: The New European Data Rules And Why They Matter For Ad, E-Commerce Players

The General Data Protection Regulation is set to go into effect May 25, and Morgan Stanley analyst Brian Nowak parsed the impact the new European data protection rules will have on e-commerce, online advertising and online travel stocks in a note.

Online Advertising

Online ad leaders will soon be forced to obtain consent from their users to collect and use their data. It's unclear how often users will have to consent and how strict regulators will be on how advertisers gain consent, Nowak said. (See the analyst's track record here.) 

Advertisers could even provide incentives for consent, such as free service subscriptions, he said. 

The following stocks could be impacted, Nowak said: 

  • Facebook Inc (NASDAQ: FB)
  • Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL)
  • Snap Inc (NYSE: SNAP)
  • Twitter Inc (NYSE: TWTR)

E-Commerce

E-commerce companies will also be required to gain consent to access user data. One of the primary strategies e-commerce companies use to drive sales is retargeting, which Nowak says could prove to be a challenge without reliable access to user data from platforms and their ad partners.

Both Amazon.com, Inc. (NASDAQ: AMZN) and eBay Inc (NASDAQ: EBAY) will be impacted by the new regulations, according to Morgan Stanley. 

Online Travel

Online travel sites, which typically make customzed, personal recommendations based on location and other data, might find targeting to be more difficult under the new rules, Nowak said. It's unclear whether location data — which is critical for online travel targeting — will fall under the scope of the GDPR, according to Morgan Stanley. Booking Holdings Inc. (NASDAQ: BKNG) and Expedia Inc (NASDAQ: EXPE) could be impacted, Nowak said. 

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