Dusseldorf You communicate via WhatsApp, navigate with Google Maps and listen to music on Spotify – three apps that can be found on almost every smartphone. Most users like to opt for the same products – and give the developers market power that they know how to use.
Apps for which there are few competing products with similar functions collect more user data than comparable applications with a smaller market share. Popular free apps in particular in a weak competitive environment have a particularly strong impact on privacy, as a study by the Leibniz Center for European Economic Research (ZEW) in Mannheim has shown, which the Handelsblatt has published in advance.
Together with scientists from the University of Zurich and the University of East Anglia, the research institute investigated how the lack of competition in the online market for apps is related to the collection of sensitive user data.
For this purpose, the researchers collected quarterly information on around 1.5 million apps in the Google Play store from October 2015 to January 2018. In order to measure the competition, the scientists oriented themselves on the categories in the store. A network of relevant competition was created for each app. Together with the number of installations and ratings, they then calculated the respective market shares of the apps.
A first, astonishing finding: In every third app category, a few, mostly free, products dominate. A third of the well over 30,000 identified app markets is therefore highly concentrated. A few providers share the market, especially with music and video players, the vast majority of gaming apps, and messenger and social media services. The strongest competition, on the other hand, is in art, design and weather apps.
Study identified 200 different permissions
The scientists measured how strongly the applications interfere with privacy by how many permissions an app asks its user after he has installed it on his smartphone. The study identified a total of 200 different authorizations, including 25 that require sensitive data such as location information or access to the phone book.
It is not surprising that messenger and navigation services in particular query such sensitive data. After all, they only work if you allow them to do just that. An effect that nevertheless does not change the central result of the study.
“The increased collection of data and the associated loss of user privacy is related to the market power of an app,” explains Reinhold Kesler, scientist at the University of Zurich and co-author of the study.
And another important finding emerges from the numbers: Data collection is particularly attractive for those developers who offer their apps for free in concentrated markets. They also tend to share information with third parties. Instead of asking the user to checkout when downloading, they sell the data to advertisers or social networks – a business model that is used to finance not only free apps, but a large proportion of digital companies.
“Data is also playing an increasingly important role as a means of payment in the mobile application market,” says Kesler. “For competition authorities,” continued Kesler, “the study once again clarifies the relevance of data protection and data portability in online markets.” What is more powerful today is no longer someone who can freely dispose of the price, but freely of data.
More: The pharmaceutical industry demands access to the planned data pool of patient files. Read more about how the industry is already benefiting from digitization here.