The Value of Personal Data in Internet Commerce: A High-Stakes Field Experiment on Data Regulation Policy.

This article examines the economic impact of personal data regulation on internet commerce through a large-scale randomized field experiment conducted in collaboration with Alibaba, China's largest e-commerce platform. By simulating a ban on the use of personal data in home page product recommendations for 555,800 customers, the study finds that restricting personal data leads to a sharp decline in recommendation relevance, customer engagement (click-through rate and product browsing), and market transactions (sales volume and amount), with disproportionate negative effects on small and niche merchants as well as newer, lower-purchase-power, female, and rural customers. The experiment also reveals that while customers partially compensate by increasing active search, this does not offset the overall loss in matching efficiency and market activity. The findings highlight the critical role of personal data in facilitating effective matching between customers and products, suggesting that data regulation policies must carefully balance privacy protection with preserving the economic value of personal data to sustain e-commerce diversity, innovation, and inclusion.