Path Dependence and Network Effects of the GDPR

This article analyzes the global dominance of the General Data Protection Regulation (GDPR) through the theoretical lenses of path dependence and network effects. The authors describe how historical decisions created a self-reinforcing legal trajectory, leading to a “lock-in” phase where the EU standard prevails as the primary global framework. They identify four specific legal mechanisms—adequacy decisions, standard contractual clauses, binding corporate rules, and extraterritorial application—that incentivize third countries and international corporations to adopt European standards. By examining the evolution from early fragmentation to current unification, the text explains why shifting away from the GDPR is increasingly difficult for global actors. Ultimately, the researchers suggest that the EU must simplify the regulation to maintain its leading position and ensure the network remains attractive to new members.

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