Using data on 4.1 million apps at the Google Play Store from 2016 to 2019, we document that
GDPR induced the exit of about a third of available apps; and in the quarters following
implementation, entry of new apps fell by half. We estimate a structural model of demand and
entry in the app market. Comparing long-run equilibria with and without GDPR, we find that
GDPR reduces consumer surplus and aggregate app usage by about a third. Whatever the privacy
benefits of GDPR, they come at substantial costs in foregone innovation.