The Supply and Demand for Data Privacy: Evidence from Mobile Apps

Abstract

We investigate Apple’s privacy “nutrition” label policy that mandates standardized disclosure of how iOS apps handle personal data. We first document stylized facts about the supply of data privacy. On the demand side, an average iOS app experiences a 14% (15%) drop in weekly downloads (revenue) when compared to its Android counterpart after privacy label release. The effect is stronger for more privacy-invasive and substitutable apps. More negative responses are also observed in countries with inadequate privacy laws, low trust in companies, and more privacy-sensitive consumers. Our findings highlight information transparency as a key barrier to data privacy protection.