Netherlands calls for European shift to post-tracking internet as privacy laws fail

The Netherlands is pushing for a radical rethink of how the internet operates, arguing that Europe should abandon surveillance-based advertising in favour of contextual advertising or paid services, and a comprehensive report commissioned by the Dutch Parliament concludes that a decade of European privacy legislation has fundamentally failed to protect citizens from the harms of online tracking. 

The timing of the call is particularly striking. As the European Commission weighs digital competitiveness against citizen protection following Mario Draghi’s recent report advocating for regulatory streamlining, the Netherlands’ Rathenau Institute is proposing something far more ambitious: questioning the internet’s entire business model. 

“Privacy, autonomy and security are too important to click away via a pop-up,” says Eefje Cuppen, director of the Rathenau Institute. The 143-page report, titled The price of free internet, represents one of the most comprehensive examinations of online tracking’s societal impact undertaken by a European government agency.

The report’s central finding challenges the prevailing European approach to digital governance. Despite landmark legislation including the General Data Protection Regulation (GDPR), the Digital Services Act and the Digital Markets Act, online tracking has not diminished – it has become more sophisticated and invasive. 

“The phenomenon of online tracking seems to be growing rather than declining,” the researchers conclude. New technologies, including generative artificial intelligence (GenAI), virtual reality, and neurotechnology, are enabling what the report terms ‘hyperpersonalisation’, where both physical and virtual environments are extensively tailored to individual users. 

This represents a fundamental shift in how European policymakers are thinking about digital regulation. Rather than incrementally tightening rules around consent and transparency, the Dutch are questioning whether the surveillance-advertising model is compatible with democratic values at all. 

The report identifies risks across multiple domains: individual privacy and autonomy, discriminatory targeting, national security vulnerabilities and threats to democratic discourse. Crucially, it argues these risks are inherent to the tracking-based business model, not merely implementation problems that can be solved by better regulation.

The economics of surveillance advertising 

The research exposes significant gaps in the claimed economic benefits of personalised advertising. While the industry frequently argues that targeted ads create a “win-win” situation for advertisers, publishers and consumers, the evidence is far less clear. 

“It remains difficult to measure how effective personalised advertisements are compared to other forms of advertising,” the report notes. The selection effect – purchases consumers would have made anyway – proves statistically challenging to distinguish from the genuine impact of advertising. 

More problematically for the European tech sector, the benefits appear to flow disproportionately to a handful of US platforms. The report finds that Dutch media companies have barely benefited from the growing digital advertising market, despite the sector’s overall growth. 

This economic analysis provides European policymakers with ammunition for a different approach. If surveillance advertising primarily benefits non-European companies while imposing costs on European citizens and businesses, the economic case for protection becomes stronger.

Contextual advertising’s technical evolution 

The report’s most concrete alternative proposal focuses on contextual advertising – showing ads based on webpage content rather than user profiles. This isn’t simply a return to pre-digital advertising; modern contextual advertising uses AI and machine learning to match content with relevant advertisements in sophisticated ways. 

Dutch advertising organisation Ster provides a compelling case study. When it introduced clear cookie consent banners in 2018, only 10% of visitors consented to tracking cookies, causing significant revenue losses. However, Ster’s subsequent development of AI-powered contextual advertising has proved surprisingly effective, with click-through rates remaining stable and conversion rates actually improving for several brands. 

These examples suggest contextual advertising may be more viable than industry sceptics claim. The technical infrastructure exists; what’s lacking is sufficient market incentive to adopt it. 

The report also examines paid service models, carefully distinguishing between different approaches. “Pay-or-nay” models – where users choose between paying for access or having no access – are legally permissible and mirror offline business practices. However, these models face significant legal challenges. The European Commission’s recent ruling against Meta’s subscription model for the six largest platforms suggests this approach may not survive regulatory scrutiny.

The research highlights successful examples of donation-based models, including Wikipedia, Signal and The Guardian’s membership programme. These demonstrate that alternative funding models can be effective, although they may not be universally applicable.

Technical challenges and opportunities 

For IT professionals, the shift towards post-tracking models presents both challenges and opportunities. Contextual advertising requires different technical infrastructure, with greater emphasis on real-time content analysis and semantic matching rather than user profiling. 

Browser-level changes are already underway. While Google abandoned plans to eliminate third-party cookies in Chrome, other browsers, including Safari and Firefox, have implemented tracking restrictions. The report suggests these piecemeal changes may actually strengthen dominant platforms rather than reducing tracking overall. 

The proposed alternatives would require significant investment in new advertising technologies. European companies that can develop sophisticated contextual advertising platforms may find substantial market opportunities if regulatory pressure continues to mount.

The report’s authors acknowledge that individual member states cannot implement these changes unilaterally. The internet’s cross-border nature requires coordinated European action, either through enhanced regulation or active promotion of alternative business models.

This coordination challenge comes at a delicate moment for European digital policy. The Draghi report’s emphasis on competitiveness suggests some appetite for regulatory rollback, yet the Dutch findings argue that stronger action is necessary to protect fundamental values. 

The Netherlands appears to be positioning itself as a voice for more aggressive intervention. The Privacy Collective, a Dutch advocacy organisation, has filed numerous complaints against major platforms and called for outright bans on tracking.

Industry implications 

For the European advertising technology sector, the Dutch proposals represent both a threat and an opportunity. Companies heavily invested in surveillance-based advertising may face pressure to pivot towards contextual alternatives. 

However, European companies that can develop privacy-preserving advertising technologies may gain competitive advantages. The report notes that current programmatic advertising involves numerous intermediaries, with up to 49% of spending going to middlemen rather than publishers or advertisers. 

Contextual advertising could disintermediate some of these players while creating opportunities for companies offering content analysis and semantic matching services. 

The research also highlights growing investor interest in privacy-preserving technologies. European startups developing contextual advertising platforms or privacy-enhancing technologies may find favourable investment climates if regulatory momentum continues to build.

The Rathenau Institute’s report represents more than academic research – it’s a policy roadmap commissioned by Parliament, and likely to influence Dutch positions in European negotiations. 

Whether other member states will embrace similarly radical approaches remains unclear. However, the technical viability of alternatives, combined with growing evidence of the societal costs of surveillance advertising, suggests the debate is far from settled. 

For European IT leaders, the message is clear: the internet’s current business model is increasingly under question. Those who can develop and implement privacy-preserving alternatives may find themselves at the forefront of the next phase of digital evolution. 

The Dutch call for fundamental change reflects a growing recognition that tweaking consent mechanisms and transparency requirements is insufficient. As Cuppen noted, protecting privacy, autonomy and democratic values may require abandoning surveillance capitalism altogether.