This paper examines how privacy regulation, specifically the General Data Protection Regulation (GDPR), has affected firm performance globally. Using data from 276,638 patenting firms across 31 countries and 22 industries, the study finds that the GDPR primarily harmed firm profitability through increased compliance costs, particularly for technology firms, which experienced a 2.1% decline in profits. Sales were not significantly affected, suggesting that the regulation mainly impacted firms through added costs rather than reduced online activity. The GDPR also increased non-operating expenses and wage bills, and accelerated patenting in GDPR-related technology fields. Smaller firms bore the brunt of these costs. While the GDPR may have increased market concentration among web technology vendors, it also spurred innovation, with firms investing in GDPR-compliant technologies and processes. The study highlights the need for further research on the long-term effects of the GDPR on productivity and economic outcomes. The findings suggest that while the GDPR has had negative impacts on firm performance, particularly for smaller companies, it has also driven innovation in privacy technology. The study concludes that the GDPR's economic consequences are complex and multifaceted, with both negative and positive effects on firms and the broader economy.This paper examines how privacy regulation, specifically the General Data Protection Regulation (GDPR), has affected firm performance globally. Using data from 276,638 patenting firms across 31 countries and 22 industries, the study finds that the GDPR primarily harmed firm profitability through increased compliance costs, particularly for technology firms, which experienced a 2.1% decline in profits. Sales were not significantly affected, suggesting that the regulation mainly impacted firms through added costs rather than reduced online activity. The GDPR also increased non-operating expenses and wage bills, and accelerated patenting in GDPR-related technology fields. Smaller firms bore the brunt of these costs. While the GDPR may have increased market concentration among web technology vendors, it also spurred innovation, with firms investing in GDPR-compliant technologies and processes. The study highlights the need for further research on the long-term effects of the GDPR on productivity and economic outcomes. The findings suggest that while the GDPR has had negative impacts on firm performance, particularly for smaller companies, it has also driven innovation in privacy technology. The study concludes that the GDPR's economic consequences are complex and multifaceted, with both negative and positive effects on firms and the broader economy.