Did Apple's App Tracking Transparency Framework Harm the App Ecosystem?

Abstract

We study the impact of Apple's App Tracking Transparency (ATT) framework on the App Store ecosystem. ATT restricted developers' access to personal identifiers used for targeted advertising. While promoted as a privacy-enhancing initiative, the policy drew sharp criticism from advertising technology firms, which predicted substantial harm to the app ecosystem. We assemble data on all apps available on both Apple's App Store and Google Play in the 18 months surrounding ATT's implementation. Using a difference-in-differences design, we examine whether the policy affected developer activity and consumer outcomes. We measure developer response through entry, exit, app updates, and adoption of Software Development Kits (SDKs), and we proxy user engagement and perceived quality using the volume and average rating of reviews. We find that the number of apps on the App Store quickly rebounded after an initial decline, driven by a temporary drop in entry rather than increased exit. Developers modestly reduced their use of Monetization and Ad Mediation SDKs and modestly increased their use of Authentication and Payments SDKs. These adjustments did not lead to meaningful changes in observable user engagement or perceived quality. We also document substantial heterogeneity across app groups: top-ranked apps adjust SDK use more than unranked apps, multi-homing apps show smaller entry and exit responses than single-homing apps, and new apps perform better post-ATT than incumbents and other pre-ATT entrants. Overall, while adaptation varied across developers, the aggregate ecosystem remained stable. Contrary to pessimistic predictions, ATT did not trigger developer withdrawal but instead prompted adjustment to a more privacy-protective environment.