Delaying Informed Consent: An Empirical Investigation of Mobile Apps’ Upgrade Decisions

In response to users’ evolving desire for choice and control over their personal data, numerous platforms across sectors have been updating privacy policies. Unlike public regulations that mandate uniform compliance, many platforms grant a more flexible time window for complementors to adopt privacy policies. Although several studies have examined the impact of privacy policies, the consequences of delayed policy adoption under time flexibility remain largely unexplored. This study is among the first to investigate the impact of apps delaying policy adoption in the context of a privacy policy change. The context of our research is the upgrade to Android version 6.0, which gave consumers more control over their personal data. Apps were given a three-year grace period to adopt the new privacy policy, during which apps that did not adopt the policy could still run on the latest Android version. We leverage this variation in policy adoption by apps to examine its impact on apps’ marketplace outcomes. By installing over 13,691 popular apps on emulators, we detect exactly when each app upgrades to version 6.0. We combine this unique data set with multiple data sets to quantify the impact of delaying the upgrade. We find that delaying the upgrade results in a significant loss of downloads and user ratings for apps. Frequently maintaining the apps without upgrading can only partially mitigate these declines. In further examining who delays upgrades and why, we find that apps that display in-app advertising and overreach for permissions are more likely to delay upgrading, suggesting a strategic trade-off between marketplace outcomes and the ability to collect data continuously. The findings of our study highlight the need to carefully consider participants’ potential strategic behaviors in designing policy implementation. We discuss the theoretical and practical implications of our findings. This paper was accepted by Chris Forman, information systems. Funding: Financial support from the Ed Snider Center for Enterprise and Markets at the University of Maryland is gratefully acknowledged. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2022.00334 .