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STRASBOURG The European Parliament movedcloseron Thursday to banningtargeted ads based on sensitive data including religious beliefs, sexual orientation and racial or ethnic origin.

A large majority of lawmakersvotedto prohibit online platforms such as Facebook and Google from showing commercials to users based on their most intimate information, in the EUs draft content moderation bill, known as theDigital Services Act(DSA).

The move comes amid sustained calls from activists to bolster online privacy and crack down on what they say is abusive surveillance exploiting peoples vulnerabilities, the likes of which resulted in large-scale manipulations such as in the Cambridge Analytica scandal.

U.S. lawmakers also on Tuesday introduced a bill with similar provisions prohibiting tech platforms and data brokers from using sensitive information to push their ads.

The new potential EU restrictions on targeted advertising could reshape the tech industry. They could affect the widely popular marketing practices underpinning tech behemoths' business models and fueling the advertising industry and traditional media organizations.

Lawmakers will now have to negotiate with the Council, representing the 27 EU governments, which has shown no interest in tackling online advertising in the DSA.

France, which is at the helm of the Council and plans to finalize the DSA, has previously shown reluctance to take heed of Parliaments appetite for new privacy rules.

On January 12 at an event organized by the Atlantic Council, French Digital Minister Cdric O said limits on targeted advertising could hamper the rhythm and progress of the adoption of the EUs tech laws, the DSA and its sister bill focused on online competition, the Digital Markets Act.

Proposed by the European Commission in December 2020, the DSA aims to create Europe-wide rules for online services. The bill seeks to crack down on illegal content, regulate online advertising and impose transparency measures on platforms' algorithms.

Galvanized by a widely supported but nonbinding call in the European Parliament to rein in targeted ads in 2020, several left-wing political groups including the Socialists & Democrats and the Greens laid out ambitious plans early on in the negotiations of the DSA to outlaw the practice of micro-targeted online advertisements.

But facing fierce opposition from center-right and liberal lawmakers, negotiators compromised on a ban on manipulative designs to nudge users to consent to online tracking, including so-called dark patterns and website notices to accept online trackers known as cookies. They also added that online platforms needed to clearly get consent from users before tracking them.

Meanwhile, tech companies wouldnt be able to target minors with ads.

Then, on Wednesday, left-wing MEPs pulled off an unexpected feat by winning the support of conservative and far-right lawmakers in what Greens MEP Alexandra Geesecalleda huge win for European citizens.

The privacy changes gave a strong signal that Parliament wants to be crystal clear on the need to do something on [tracking ads], lead lawmaker Christel Schaldemose, a Dane from the S&D, told POLITICO.

Parliament also approved an amendment to force online platforms to make sure that users who declined to be tracked could still have alternative options to access the services, meaning that a platform like Instagram couldntde factooblige users to be tracked to view posts on its app.

MEPs approved the preliminary lead committeerulesas lawmakers also decided to force online services to respect fundamental rights enshrined in the EU charter, including freedom of expression and information, in their terms and conditions.

Cloud hosting companies and platforms, meanwhile, could have to enable anonymous use of and payment for their online services.

Parliament also agreed that small- and medium-sized companies could request assistance when seeking legal representation in the EU, a requirement to comply with the DSA.

An amendment to get platforms to inform media organizations of content moderation decisions based on their terms and conditions, and give them a chance to challenge those decisions, before taking action was rejected. However, MEPs voted to ensure online platforms would also have to respect the freedom and pluralism of media.

The final rules could come into force as soon as 2023.

This article has been updated.

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European Parliament pushes to ban targeted ads based on health, religion or sexual orientation - POLITICO.eu