Concerns over data privacy have soared following revelations surrounding social media giant Facebook and UK-based analytics firm Cambridge Analytica.

Privacy advocates are calling for tighter regulations. Now regulators are faced with a question: to what extend should they rein in an industry that contributes billions to economies around the world?

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A host of industries, not just powerful social media companies and their advertisers, now rely on user data to craft products via big data analytics.

And the Internet of Things and other artificial intelligence based services like smart homes, smart cars and smart cities — will contribute billions, if not trillions, in revenue in the years to come.

Meanwhile, the European Union is scheduled to implement the General Data Protection Regulation (GDPR) privacy rules on 25 May.

GDPR is set to dramatically change data collection practices by requiring web companies to obtain implicit permission from users to use their data or face big fines.

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The US does not have any similar rule and regulators have historically kept a hands-off approach to regulating the internet.

Any new legislation could largely target transparency in political advertising on the internet.

GDPR, while costly, could become a boon for data-driven marketing.

Those users who actively opt in will end up providing better data, smarter, and more effective advertising. Opt-in methods could even become more creative and companies could start offering incentives.

Parts of GDPR could be adopted by the US as companies look to streamline and optimise data collection.

For now, little appears to be changing. Broker Wedbush estimates that fewer than 5% of Facebook’s two billion users have changed how they use the social networking platform as a result of the recent controversies.

While Facebook has seen a few advertisers defect, such as Mozilla, it’s unlikely bigger advertisers will leave in droves — Facebook’s two billion users are difficult to ignore.