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Competition and privacy in online markets: Evidence from the mobile app industry

Reinhold Kesler, Michael E. Kummer and Patrick Schulte ()

No 19-064, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Policy makers are increasingly concerned about the combination of market power and massive data collection in digital markets. This concern is fueled by the theoretical prediction that more market power causes firms to collect ever more data from their users. We investigate the relationship between market power and data collection empirically. We analyze data about more than 1.5 million mobile applications in several thousand submarkets of Google's Play Store. We observe these data for over two years and combine information on an app's data collection with information about its competitive environment. Our analysis highlights a robust positive relationship between market power and data collection. We find that more data are being collected in concentrated markets, and apps with higher market shares collect more data. This pattern robustly emerges across a series of cross-sectional and panel regressions as well as a series of specifications that exploit exogenous variation.

Keywords: Competition; Market Power; Privacy; User Data; Apps (search for similar items in EconPapers)
JEL-codes: L17 D4 D85 D29 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-com, nep-ict, nep-ind, nep-pay and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:19064

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