Balancing Privacy and Innovation: The Impact of the EU-GDPR on the Online Market for Mobile Applications

The value of data has become a central topic of public debate. On the one hand, new, data-based technologies have enormous innovation potential due to improved information flows and decision quality. On the other hand, (too much) data in the wrong hands can also pose significant societal risks, especially in terms of privacy. Both innovation and a sufficient level of privacy are important long-term goals of successful economic policy.

The aim of this project is to empirically investigate the impact of the European General Data Protection Regulation (GDPR) in light of this trade-off between innovation and privacy protection in the international context, especially from the European perspective. The GDPR primarily aims to strengthen the rights of individuals with regard to the protection of their personal data. Concerns have been expressed that the requirements associated with the regulation regarding the handling of data will slow down the innovation dynamics of new applications. From a European perspective, this also has implications for international competitiveness, since leading countries such as the USA or China have less restrictive data protection laws.

The empirical analyses of the research team will focus on the online market for mobile applications, which is becoming increasingly relevant and is characterized by a high level of innovation and broad access to user data.

Project duration: January 2019 – December 2020

Internal members, ZEW – Leibniz-Centre for European Economic Research, Mannheim:

• Rebecca Janssen, ZEW Research Department “Digital Economy”
• Reinhold Kesler, ZEW Research Department “Digital Economy”
• Dr. Jörg Ohnemus, ZEW Research Department “Digital Economy”

External members:

• Dr. Michael Kummer, University of East Anglia (United Kingdom)
• Prof. Joel Waldfogel, University of Minnesota, Minneapolis (USA)