In the paper entitled “AVG and the Lost Generation of Innovative Apps”, economic researchers from several universities in the EU, UK and US examined the impact of the GDPR on the mobile app business.
To compile their paper, the researchers looked at 4.1 million apps in the Google Play Store between July 2016 and October 2019 to discover that the privacy benefits of the GDPR came with “significant costs for consumers, of a reduced choice set, and for producers of lower revenues and higher costs”.
While consumers reportedly had fewer choices when it came to apps, the apps available on the Play Store and Apple’s App Store saw their sales grow as total sales on both platforms grew from $43.6 billion in 2016 to $83.6 billion in 2019 according to The register†
Transformed by the GDPR
When the GDPR came into effect in May 2018, app developers had to comply with rules requiring consent for data collection, data transparency, purpose limitation, accuracy, limited retention, confidentiality and accountability to distribute their apps in the EU.
The researchers’ paper, distributed through the US National Bureau of Economic Research and soon to be submitted for journal publication, revealed that the Android app market has been transformed as a result of the GDPR.
At the same time that the number android apps decreased by about a third after the implementation of the GDPR, fewer new apps were created (47.2% less) and use of the apps that remained in the Play Store fell by 45.3 percent. While this was happening, the average number of users per app increased by about a quarter (25%) as end users migrated from low-quality apps to higher-caliber apps.
Still, an argument can be made that the GDPR worked as intended, as low-quality apps that disrespected their users’ data disappeared from the Play Store. Consumers instead turned to apps with the necessary resources to protect their data while complying with the GDPR.
Through The register