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It's certainly legal to get you to accept advertising, or buy the service.

What they can't do is say "no tracking, no service".

I wish this were true. It’s not. Tracking can be seen as “legitimate interest” because the money earned from that is needed to run the service.

If we could turn tracking I to a banned way to earn money from free visitors, I think we’d all be better off. This is not how gdpr works today.

No, it cannot, that’s explicitly not what legitimate interest is about. If that’s the way it’s playing out in Germany then that’s sad, but that’s a problem with the national regulator. Other regulators are dropping the ball on enforcement so it doesn’t surprise me, but that is expressly not legitimate interest.

Legitimate interest is things like a legal requirement to maintain PII because of the services offered.

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