T he European Union enacted its General Data Protection Regulation (GDPR) to protect the personal data of citizens and harmonize privacy policies acro

Impacts of the European Union’s Data Protection Regulations

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2022-07-06 20:00:09

T he European Union enacted its General Data Protection Regulation (GDPR) to protect the personal data of citizens and harmonize privacy policies across member states. The regulation strengthened consumers’ privacy rights and required app developers to ask customers’ permission before they could use their data to, say, target online ads or conduct other revenue-producing activities. Developers also had to guarantee that customers could access, rectify, erase, and restrict the processing and portability of personal data. The law was enacted in 2016 and implemented two years later.

GDPR has made European apps less intrusive, but sharply reduced the introduction of new ones and led to many being withdrawn. In GDPR and the Lost Generation of Innovative Apps (NBER Working Paper 30028), Rebecca Jan ß en , Reinhold Kesler, Michael E. Kummer , and Joel Waldfogel detail the effects of the privacy improvements by studying the set of apps that were available on Google’s Play Store between July 2016 and October 2019.

New rules made European apps less intrusive, but entry of new apps fell 47 percent and the number of new entrants that became successful fell by more than 40 percent.