Privacy regulations such as the European Union’s General Data Protection Regulation (GDPR) may yield hidden advantages for businesses, according to a new study. Steven Maex, assistant professor of accounting at George Mason University, argues that these laws can spur improvements with wider consequences beyond mere data protection.
The digital economy thrives on converting personal data into revenue, but regulation disrupts that frictionless flow. Rather than viewing compliance as a cost, Maex suggests it can act as a catalyst for broader organizational enhancements.
Maex, also a Unanet Corporate Partner Faculty Fellow, did not provide specific figures on the magnitude of these benefits. The study remains qualitative, outlining potential upsides such as improved data management practices and customer trust.
If firms embrace privacy rules strategically, they might gain competitive advantages through better data governance. However, the research cautions that not all companies will realize these gains equally.
A counterargument holds that privacy regulations impose significant compliance burdens, especially on smaller firms that lack resources to turn mandates into opportunities.