Don’t pull the away from Europe’s small firms
As both a former legislator and a businessman, I know how difficult it is to strike the right balance between protecting consumers and enabling entrepreneurship. Europe has rightly put in place strong standards through the GDPR and the Digital Services Act (DSA), and these must be enforced. But it is equally important to recognise how small firms depend on lawful, consent-based tools to stay competitive in crowded markets.
Even with high-level reviews like the Draghi report on EU competitiveness – which warned of Europe’s declining productivity and excessive regulatory burdens – and repeated concerns from the United States about over-regulation, the EU still hasn’t got it right. The balance between protecting consumers and enabling growth remains elusive. The Digital Fairness Act (DFA) is the next test of whether Brussels can safeguard citizens while avoiding new barriers for the firms that create jobs and serve communities.
A new EPPP survey, covering 2,092 small and medium-sized enterprises (SMEs) across six Central and Eastern European (CEE) countries, confirms what business owners already know: nearly two-thirds of firms that advertise online say they rely on targeting tools like location, age or interests to reach the right people, serving as the backbone of how small firms connect with customers today. In addition, almost half of CEE SMEs report that audience-targeted ads generate at least a quarter of their total revenue – clear evidence that this is a core driver of their business performance.
And the reason is simple: the tools work. The most common benefits cited are finding new customers (≈66%), reaching people nearby (≈43%), and boosting sales (≈34%). Looking beyond individual transactions, around 84% say online ads allow them to compete with bigger or more established rivals. That balance between small and large competitors is what a level playing field should mean in practice.
Across Europe, this way of doing fair, competitive and responsible business is now under the spotlight as policymakers debate the Digital Fairness Act (DFA). The goal of stronger consumer protection is widely shared. Striking the right balance between protecting citizens and enabling entrepreneurship is never simple. Concerns about manipulative design and opaque consent flows are real, and they must be addressed through firm enforcement of the Digital Services Act (DSA). At the same time, the debate raises important questions about the future of the very tools that small businesses depend on to reach customers. For SMEs in the CEE and beyond, this isn’t just another legislative exercise in Brussels; it is a decision that could directly influence how they compete, grow and remain visible in a crowded marketplace.
Europe already prohibits sensitive-data targeting and ads to minors under the DSA, and those rules should continue to be firmly enforced. But if new measures go so far as to make everyday, consent-based personalisation unworkable, it’s the SMEs that will feel it first. The survey shows nearly half of them fear losing customers (48%) and seeing overall performance drop (46%) if targeting is restricted. These numbers translate into very practical consequences: hiring decisions, prices and product lines.
There’s another side to growth: measurement. Most advertisers in the survey track what works. Take that ability away and many expect weaker campaigns and slower growth because they can’t learn or adjust their spend. The logic is simple: targeting helps reach the right people, measurement shows if it worked. Within the guardrails of GDPR and the DSA, SMEs need and benefit from both.
That means keeping what works under Europe’s sound standards. Preserve lawful, consent-based personalisation for adults. Harmonise consent flows to cut friction without undermining rights. Enable privacy-preserving measurement so a small shop can see if last week’s spend paid off and adjust. These are not privileges, but tools already embedded in Europe’s high-standard framework.
This is also a call for competitiveness. Europe can enforce strong protections and still back its entrepreneurs. The data here are not coming from platforms; they reflect the daily reality of SMEs in Slovakia, Czechia, Poland, Hungary, Lithuania and Croatia trying to prosper in a high-standards regime. If the rules make consent-based tools unusable, the cost will not just fall on “big tech.” It will land on the businesses we rely on to hire locally, serve their communities and support local economies.
The Commission is listening. SME voices should be heard in this process, and policymakers must make sure the final proposal protects citizens while still giving Europe’s smallest businesses a fair chance to compete. That balance is possible – and the evidence shows it.
