Advertising powers the digital economy. It allows businesses of all sizes to reach the right audiences and helps keep online content and services accessible to users. Yet, ongoing regulatory debates risk undermining this model, particularly by restricting targeted advertising. This push comes despite an already dense EU and national regulatory framework. Europe doesn’t need more laws, it needs better enforcement of those already in place.
Why advertising matters, for Europe’s economy and consumers
Advertising plays a vital role in helping businesses, from start-ups to large companies, grow, innovate, and compete. In the digital economy, where visibility is essential and often determining, advertising enables European tech firms and SMEs to reach audiences beyond their local markets. This access gives new and independent players a chance to be seen and heard.
For consumers, advertising offers more than just access to information. It fosters choice, introducing alternatives at different prices, encouraging competition, and enabling more relevant shopping experiences. A sustainable brand, a local seller, or a challenger to a market incumbent can all reach consumers thanks to advertising. When done transparently and responsibly, as required under EU laws like the GDPR and DSA, advertising becomes a force for both innovation and consumer empowerment.
The cookie misconception
Cookies are often misunderstood as being used solely for advertising. In reality, they serve essential technical functions, helping to secure websites, prevent fraud, and improve user experience. They also enable frequency capping, ensuring users aren’t bombarded with the same advert repeatedly. Overly broad restrictions on cookie use could compromise these functions and harm user experience.
The contextual advertising myth
Some policy voices advocate for contextual advertising, where ads are served based on webpage content rather than user behaviour, as a more ethical alternative. But this view ignores economic and practical realities.
For many businesses, contextual ads are far less efficient. Advertisers would need to increase their budgets two to fivefold to match the effectiveness of personalised ads, an unsustainable cost, especially for SMEs. This shift would primarily benefit large players with deep pockets.
Contextual ads are also less relevant to users. There simply are not enough appropriate contexts to serve meaningful ads at scale, and users visiting a page are not necessarily interested in the associated products. The result would be more irrelevant ads, lower engagement, and reduced revenue for publishers.
To compensate, publishers may flood users with more ads, worsening the browsing experience. Meanwhile, dominant platforms with extensive data sets would only become stronger, further distorting the market.
Are we asking the right questions?
Before introducing new advertising rules, the EU must ask:
- What specific harms are we trying to address? And how severe are they?
- Are they not already covered by existing laws such as the GDPR, the ePrivacy Directive, the DSA, consumer protection legislation, or even criminal law?
- Could further restrictions on targeted advertising entrench dominant platforms and disadvantage European businesses?
If intervention is deemed necessary, it should be tailored, proportionate, and based on evidence and risk. Clear and comprehensive impact assessments, conducted by both the European Commission and co-legislators, should be carried out before any new legal proposals are introduced.
A complex web of overlapping rules
The interaction between the GDPR, DSA, DMA, ePrivacy Directive, and other EU frameworks has created a fragmented, and at times contradictory, regulatory environment:
- Misleading and Comparative Advertising Directive: Prohibits advertising that deceives or is likely to deceive consumers and influence their economic behaviour. It sets clear rules for lawful comparative advertising, ensuring it is not misleading and does not unfairly discredit competitors.
- AVMSD: Requires that online advertising be clearly identifiable, not harmful to minors, and free from incitement to hatred. It aims to ensure a level playing field across media.
- ePrivacy Directive: Promotes a strict consent-by-default approach, with very limited exemptions.
- GDPR: A single law on data protection, however applied through 27 different interpretations, fostering a risk-averse environment in many EU countries.
- AI: Inconsistencies between the AI Act and GDPR hinder European tech companies from fully unlocking the potential of personalisation powered by AI and data.
- Cookie banners: Consumer authorities claim they are too complex, while data protection authorities often argue they are not comprehensive enough.
- DSA: Adds transparency and profiling rules on top of the GDPR. Its impact for consumers still needs to be properly assessed before introducing any further regulation.
Rather than introduce yet more rules, the EU should prioritise coherent guidelines that consolidate and clarify obligations across this regulatory patchwork.
European tech calls for clarity, not complexity
The future of digital advertising should be shaped not by additional laws, but by better enforcement of existing ones, and by promoting responsible advertising practices.
Advertising plays a vital role in Europe’s digital ecosystem. It supports consumer choice, business growth, and competitiveness.
The EU should focus on:
✔ Improving regulatory coordination
✔ Encouraging privacy-enhancing technologies
✔ Supporting European businesses to compete globally
A more balanced, principle-based approach will serve consumers, companies, and the European economy better than yet another round of legislation.
About the European Tech Alliance
EUTA represents leading European tech companies that provide innovative products and services to more than one billion users. Our 33 EUTA member companies from 15 European countries are popular and have earned the trust of consumers. As companies born and bred in Europe, for whom the EU is a crucial market, we have a deep commitment to European citizens and values.
With the right conditions, our companies can strengthen Europe’s resilience and technological autonomy, protect and empower users online, and promote Europe’s values of transparency, rule of law and innovation to the rest of the world.
The EUTA calls for boosting Europe’s tech competitiveness by having an ambitious EU tech strategy to overcome growth obstacles, making a political commitment to clear, targeted and risk-based rules, and enforcing rules consistently to match the globalised market we are in.
For media inquiries, please contact:
Victoria de Posson, EUTA Secretary General
E-mail: victoria@eutechalliance.eu
E-mail: info@eutechalliance.eu
Phone: +32 476 25 08 16
www.eutechalliance.eu
