Cyber-security, Privacy and Ethics of IS

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Paper Number

1481

Paper Type

short

Description

Data has become a source of competitive advantages for businesses. The firms’ extensive collection of personal data has sparked a debate over data privacy and security. Government regulators start establishing privacy regulations to ensure the transparency of data collection and processing. How these regulations impact competition is a critical question that has not been thoroughly studied. Our study applies a DID framework to examine the effect of GDPR on the mobile app market. We find that data privacy regulations can be both anti-competitive and pro-competitive. Specifically, we find that the competition among free apps has become more volatile after the implementation of GDPR than before. Interestingly, however, the opposite effect is found among paid apps. Our results suggest that GDPR has significantly affected the app market’s competition. Also, the revenue models influence this impact. Our work contributes to multiple streams of the IS literature and provides meaningful insights for policymakers and firms.

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Dec 12th, 12:00 AM

How Data Privacy Regulations Affect Competition: Empirical Evidence from Mobile Application Market

Data has become a source of competitive advantages for businesses. The firms’ extensive collection of personal data has sparked a debate over data privacy and security. Government regulators start establishing privacy regulations to ensure the transparency of data collection and processing. How these regulations impact competition is a critical question that has not been thoroughly studied. Our study applies a DID framework to examine the effect of GDPR on the mobile app market. We find that data privacy regulations can be both anti-competitive and pro-competitive. Specifically, we find that the competition among free apps has become more volatile after the implementation of GDPR than before. Interestingly, however, the opposite effect is found among paid apps. Our results suggest that GDPR has significantly affected the app market’s competition. Also, the revenue models influence this impact. Our work contributes to multiple streams of the IS literature and provides meaningful insights for policymakers and firms.

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