Europe’s data protection system has reduced the number of apps available in Google Play, increased costs, and reduced revenue, according to a study published Monday.
And as costs rise, fewer apps are being created, at the expense of consumers and the mobile app economy, it claims.
In a paper titled “GDP and the Missing Generation of Innovative Applications,” economists Rebecca Janssen (Zeu Mannheim, Germany), Reinhold Kessler (University of Zurich, Switzerland), Michael Kommer (University of East Anglia, UK) and Joel Waldvogel (University of Minnesota, USA) examined the impact of Europe’s General Data Protection Regulation (GDPR) on the mobile app business.
The paper, which was distributed via the US-based National Bureau of Economic Research, found that “whatever the benefits of GDPR privacy protections appear to be accompanied by significant costs to consumers, from a diminishing range of choices, and to producers from reduced revenue and increased costs.”
We were told that academics looked at 4.1 million apps available through Google Play between July 2016 and October 2019. Currently, Google Play has about 3.48 million apps, up from about 2.2 million in 2016. GDPR approved ) shortly before the survey period, in April 2016, although it wasn’t activated until May 2018.
According to the newspaper, the number of Play Store apps rose to 2.8 million in the fourth quarter of 2017, before the app was enacted, and then “decreased by about 1 million — about 32 percent — by the end of 2018. The apps available in AppBrain saw a similar decline, at 31 percent.” Between the beginning of 2018 and the end of 2018.
App earnings can be earned through in-app purchases, in-app purchases or in-app advertising. Together, the two largest mobile app platforms (Apple and Google) succeeded in increasing total revenue from $43.6 billion in 2016 to $83.6 billion in 2019, and two-thirds of that went to Apple, the paper says.
Mobile ad revenue across both platforms grew from $80.7 billion in 2016 to $189.2 billion in 2019, researchers say Google took in about $42.8 billion in 2016, rising to $95.9 billion in 2019. Mobile ad revenue Mobile during this period just over two-thirds of the total revenue of the application.
Under the General Data Protection Regulation (GDPR), application developers face the cost of complying with rules that require consent to data collection, transparent data processing, purpose identification, accuracy, limited retention, confidentiality, and accountability.
The research paper, which has been presented at several economic conferences and will be submitted for publication in journals, found that the Android app market has changed due to the General Data Protection Regulation (GDPR). As noted, the number of Android apps fell by about a third in the quarters following law enforcement. Under the GDPR, fewer new apps were created – entries for new apps fell by 47.2 percent – and use of the remaining apps fell by 45.3 percent.
Moreover, the average number of users per app increased by about 25 percent — users migrated toward higher-quality apps — and apps became “somewhat less intrusive after the GDPR,” even though this was already a pre-existing trend.
cause and effect?
Dr. Lukasz Olejnik, an independent researcher and consultant on privacy, told record In an email he praised the researchers for conducting a complex and complex study, but questioned whether the reported effect could be causally related to the GDPR.
“The authors seem to ignore, or do not know, the fact that data protection laws existed in Europe before the General Data Protection Regulation (GDPR) as well,” Olejnik said. For example when I read the following in the paper: “Under the General Data Protection Regulation (GDPR), developers must obtain user consent to continue processing user data…”, I couldn’t help but think that this sentence was also completely correct before General Data Protection Regulation (GDPR).
It is clear that the authors ignore, or are not aware, the fact that data protection laws before the General Data Protection Regulation (GDPR) existed in Europe
“Data processors must have an appropriate legal basis for data processing, one of those reasons being consent. So what is the impact reported in the paper really showing? Privacy violations and non-compliance prior to the GDPR?”
Olejnik said it is important to realize that privacy is important not only morally and ethically but economically.
“The EU competition inquiry process already acknowledges this, by including privacy as an integral parameter of welfare analysis – meaning that privacy is not only a valid concern (it is a constitutional right in the EU), but can be reconciled with the economics and aspects of competition.” “This year the EU Commission will update more than a dozen EU competition laws, and I expect these updates will reflect the importance of privacy.”
Max Schrems, President Emeritus of Noyb and Advocate/Advocate for the Schrems I and Schrems II cases said, record That while he was unable to comment on the details of the paper, he has seen plenty of opposition against the GDPR.
“If the GDPR is the biggest killer, we will see a large number of apps or websites that are not available in the EU, while they are available in the US,” he said. “This is actually a trend, but only in very specific cases (such as local US news outlets that have essentially no readers in the EU, and therefore just didn’t care about GDPR).”
Schrems suggested that there are many other factors to consider that don’t seem to count, such as periodic app store purges. He also questioned why a side-by-side comparison with US and EU applications was not done.
“Maybe some of the ‘flashlight apps’ are gone by now, but I’m not sure if anyone has missed them,” he said. “I think people have more demand for fair quality apps, and these apps usually don’t do bad things with your data, so they don’t have much need to adapt to GDPR. So instead of counting the number of apps, it’s probably more important to see if Any quality or relevant apps were gone.”
“In short, we have not had any relevant applications withdrawn from the European Union due to GDPR in the past three years that we have been working on it,” Sharmas said. “We also didn’t get any emails or comments in this direction (and receive complaints about everything). So I personally have doubts if this is really a ‘thing’…”
In a phone interview, co-author Michael Comer, lecturer at the University of East Anglia in the UK, said, “We recognize the use and potential value of data regulation and user privacy in the digital realm, but it appears that GDP – all the value it may have generated despite Who – it has had a very high cost to innovate in the app market.”
Comer said a fall of a third sounds frightening, but the paper notes that these apps account for just 3 percent of app usage. “These apps, much like Max [Schrems] Suspects, useless. This is not the problem. …the problem is that getting into the app market is becoming much less attractive. And we’re seeing far fewer new apps being created.”
Comer emphasized that what he and his colleagues calculated was the long-run market equilibrium. “If this continues in the long term, and if neither the EU nor the app market finds a solution to this problem, after seven to ten years, the app market will be a third less valuable,” he explained. .
In response to Olejnik’s suggestion that researchers may have overlooked that other privacy regulations predate the GDPR, Kummer, who is Austrian, said that he and two of his co-authors are native German and a fourth also speaks German, all of whom are also familiar with the laws European privacy.
“Our main argument is basically that complying with the law involves costs for a developer who has not adhered to it [GDPR and related data protection] before the regulation is applied.
Kommer said he hopes the paper will encourage regulators to look at what the laws are already doing and make adjustments if necessary.
“It is very difficult to actually causally assess the impact of these laws,” he said, noting that there is no equivalent to controlled trial by the pharmaceutical industry when it comes to market regulation.
“We issue these policies and we don’t actually design any randomized controlled trial or any kind of systematic approach to how to assess what new regulations do for companies in the marketplace. That’s the missing piece here.” ®