GDPR and the Lost Generation of Innovative Apps

Joel Waldfogel (University of Minnesota and NBER)

September 6, 2022, 14:00–15:00

Zoom Meeting

Economics of Platforms Seminar


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.