Businesses rely on cost-effective and data-driven marketing to reach customers, validate their business models, and scale internationally. Unlike large corporations with established brands and extensive resources, startups depend on targeted advertising to compete in a crowded digital marketplace.

In the mission letter addressed to the Commissioner for Democracy, Justice, and the Rule of Law, Michael McGrath, President von der Leyen calls for a Digital Fairness Act. While the details remain vague, such regulation risks imposing severe restrictions on targeted advertising – one of the most effective tools for businesses and organizations to develop products, reach customers and scale their businesses.

Studies show that:

• Personalised advertising generates €100 billion in additional revenue across the EU, contributes €25 billion to GDP, and supports 570,000 jobs.

• SMEs gain up to €80 billion in extra revenue through targeted advertising, and 75% of SMEs say they would not be able to find customers without it.

• Without targeted advertising, media outlets could lose up to 60% of their advertising revenue, leading to paywalls, closures, and less media diversity.

• For startups, targeted advertising is often the only way to reach customers without large marketing budgets. A ban would make it nearly impossible for new companies to grow and compete with large players.

• When companies can’t grow at home, they move abroad. We risk destroying our own ecosystem at a time when the competitiveness gap with the US and China is growing by the day.

In a market where European businesses are already struggling against global competitors, further restrictions could be the final blow to many promising ventures and would widen the competitive gap globally.