Third parties in the app market and economics of privacy

In the mobile applications market, the majority of mobile apps are free to download. We focus on some special features of this market such as access to specific user data and growing importance of third parties. Many apps features and in particular advertising, business analytics are offered via third parties which are embedded into the apps. This third parties market is hidden to consumers but it offers an important value added to app functionalities. We investigate whether personal data are more likely to be collected by apps that use third parties such as firms offering social network services or access to advanced services. We find that apps that are associated with big third parties are less likely to collect personal data. The results suggest that big firms have the competences to extract value from data without collecting too much personal data.