Spyware? This is about logging activity of users on the same app that you built, not tracking them across the internet.

Writing down what someone does while interacting with your own business was never "criminalized" to begin with.

Businesses do pay for this product.

Unilaterally making tech products illegal after backlash in the media is precisely why capital is deallocated from Europe to other places with less reactive regulatory environments and leaves the people in those countries poorer than they would have been, less able to afford vacations with their family, higher quality housing, air conditioning, appropriate medical care. These effects all spill over to every day life in Europe.