The Impact of Apple's App Tracking Transparency on App Monetization

Recent years have been characterized by privacy regulations amid concerns of exploitative data collection and use, thereby also setting boundaries to the data economy that fuels today's ad-funded Internet. An example is Apple's App Tracking Transparency (ATT), which necessitates explicit consent for tracking users outside of an app and potentially undermines revenues from advertisements. This paper studies, whether and how app developers turn to payments as an alternative revenue source in response to a more privacy-preserving environment. Specifically, we use rich web-scraped data to compare the monetization of more than 580 thousand apps on Apple before and after the privacy change and across platforms with apps on Google in a difference-in-difference setting. The results suggest that ATT brings back paid apps and reinforces the industry trend towards in-app payments. Although the impact is small, it is more pronounced for apps relying on Apple as a platform and for apps that employ user tracking targeted by the privacy change