GDPR hurts bottom line for Twitter & Nielsen, as shares of each tumble – One World Identity
The monetary impact of Europe’s General Data Protection Regulation continues to take shape, as both Twitter and Nielsen this week cited the effects of GDPR as hurting their company’s profits last quarter, helping to send the shares of both companies tumbling.
Note: Read OWI’s research, “Trust, Safety & Compliance: A Survivor’s Guide to GDPR-mageddon,” the definitive primer on privacy rules in the European Union.
Shares of Nielsen fell as much as 27 percent in trading on Thursday, eventually settling at down about 25 percent for the day. And as of Friday afternoon, shares of Twitter were down about 20 percent.
The earnings reports from both companies come just days after Facebook saw its stock price plummet 20 percent, as the social media giant said GDPR led to a million active users abandoning the platform. Facebook also cautioned that the effects of GDPR, which took effect in May, were only partially felt during the quarter, and further consequences could be coming.
In its earnings report, Nielsen noted that GDPR and “other consumer privacy considerations” offset the company’s Marketing Effectiveness revenues.
And Twitter noted that the rollout of GDPR in Europe contributed to the platform’s user attrition, though CFO Ned Segal added that the company’s own efforts to cleanup fake accounts was the main factor in user decline.
However, lawmakers in EU have disagreed, saying that scandals like Russian meddling in foreign elections have been the main driver in issues at platforms like Facebook and Twitter.
“GDPR went into application amid a succession of Facebook scandals involving Cambridge Analytica and other apps,” Andrea Jelinek, head of the European Data Protection Board, told Bloomberg Quint. “If GDPR has changed anything, it’s that users are now more aware of their rights and ready to exercise them.”
OWI Insight: For Twitter, Facebook, and even Nielsen, GDPR is not the sole cause of their struggles. Rather, the current climate regarding personally identifiable information and digital identities is something of a perfect storm. GDPR has been in the works for years prior to its implementation in May, but it arrived amid a number of related controversies, including the propagation of fake news, the infestation of fake user accounts, and the unethical access of data from firms like Cambridge Analytica. Double-digit share price drops seen by companies this week reflect overall and ongoing changes related to personal data, of which GDPR is a part, but is not the determining factor.