This paper examines the impact of the General Data Protection Regulation (GDPR) on firm performance, particularly in the context of firms targeting European consumers. The authors use a novel measure of firm exposure to the GDPR based on inter-industry linkages from the OECD Inter-Country Input-Output (ICIO) Tables to compare outcomes for firms at different levels of exposure to EU markets before and after the GDPR's enforcement in 2018. They find that the GDPR had unintended negative consequences, primarily through increased compliance costs, leading to a 2.1% decline in profits for technology firms, while sales remained unaffected. The regulation also increased non-operating expenses and wage bills, suggesting that the negative impact is likely transitory. Smaller companies were disproportionately affected. Additionally, the GDPR increased patenting in technology fields related to privacy, indicating firms' efforts to develop compliant technologies. The study highlights the economic implications of the GDPR and suggests that while it may have short-term costs, it could lead to long-term benefits through increased innovation and compliance.This paper examines the impact of the General Data Protection Regulation (GDPR) on firm performance, particularly in the context of firms targeting European consumers. The authors use a novel measure of firm exposure to the GDPR based on inter-industry linkages from the OECD Inter-Country Input-Output (ICIO) Tables to compare outcomes for firms at different levels of exposure to EU markets before and after the GDPR's enforcement in 2018. They find that the GDPR had unintended negative consequences, primarily through increased compliance costs, leading to a 2.1% decline in profits for technology firms, while sales remained unaffected. The regulation also increased non-operating expenses and wage bills, suggesting that the negative impact is likely transitory. Smaller companies were disproportionately affected. Additionally, the GDPR increased patenting in technology fields related to privacy, indicating firms' efforts to develop compliant technologies. The study highlights the economic implications of the GDPR and suggests that while it may have short-term costs, it could lead to long-term benefits through increased innovation and compliance.