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

Several major countries are planning profound regulatory changes to address growing concerns related to market power and data collection in digital markets. We construct a panel data set that allows us to observe data collection by more than 1.5 million mobile applications over two years. We use a novel network-based approach to define several thousand submarkets on Google's Play Store and characterize apps' competitive environments. We are the first to document a robust positive relationship between market concentration and data collection. Our results inform the ongoing policy debate about privacy and competition between antitrust authorities, policymakers, and the public.