History suggests that every time a political entity chooses the winners and losers in a market that bad things happen -- usually in the form of a small number of increasingly larger companies capturing the market.

Google and FB (with their small army of lawyers) can afford to jump through all the hoops to make the regulators happy while "a small Belgian newspaper" will probably just get steamrolled.

>What's debatable is whether targeted advertising is necessary for a business to maintain that profit. The GDPR suggests it isn't.

You're right to a degree. You're right, because ad revenue from the EU is a lot lower than the US. Even if targeted ads in the EU aren't a thing, then a service that mostly gets US ad clicks and ad views will be able to handle it just fine. However, this means that EU viewers/readers will be treated as second class citizens.

>However, this means that EU viewers/readers will be treated as second class citizens.

Doesn't the fact that the rest of the world is scrambling to come to grips with an EU regulation and European privacy standards suggest the opposite?

It's hard to tell what fraction of websites have made shifts out of the enormous amount of businesses that exist on the web and serve EU consumers. On top of that, it's still too early to tell what the effects of the law will be. Many are waiting to see how it will be implemented.