Source: Rebecca Janßen, et al. “GDPR and the Lost Generation of Innovative Apps,” NBER Working Paper Series, Working Paper 30028(May 2022).
Commentary: The European Union’s General Data Protection Regulation (GDPR) imposes additional operations costs on app developers and lowers apps’ revenues by diminishing their monetization opportunities. Studying the availability, usage, and installations of apps on the Google Play Store between 2016 and 2019, Jansen et al. estimated that more than one-third of available apps were forced to exit the marketplace and that the entry rate for new apps fell by 47.2 percent as a consequence of GDPR’s enactment in May 2018. Furthermore, the researchers estimated that GDPR will decrease consumer surplus by 32 percent in the long run as potentially high-value-generating apps are less likely to make it to market.
