Study: Europe’s Aggressive Privacy Regulations Are Killing App Innovation

“Compliance costs are high and fines for failing to do so are significant”

“The working paper’s four writers drilled down into the data and determined that GDPR helped push the exit of a third of available apps and  also suppressed the introduction of new apps into the market. New app introductions in the quarters following the launch of GDPR enforcement dropped by half.

“Whatever the privacy benefits of GDPR, they come at substantial costs in foregone innovation,” the authors note.”

“a sharp decline in both successful and unsuccessful apps entering the market. It wasn’t just bad or predatory apps being affected by GDPR.”  

” They also calculate that GDPR raises costs to produce apps by more than 30 percent.”

“The report’s authors conclude that when the quality of a product is unpredictable (like an unknown or not-yet-existent app), the ease of entry into a marketplace is important to help determine its value to consumers. When regulatory barriers like GDPR drive up entry costs, then there can be “substantial [consumer] welfare losses” in the form of stillborn products and services we might want or need but never see.”

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