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I understand the ideal here, but I do genuinely wonder, if a heavy amount of data collection is necessary for complex tech services to be provided at no monetary cost, then the obvious consequence of a policy like this will be paywalls. You see that with newspapers, where even the most obnoxious level of advertising generally isn't enough to cover costs.
And will people actually pay money to use something like Google Search, Gmail, or Instagram? Paid e-mail providers that respect privacy already exist, and people generally don't use them, because people don't actually care that much. Is it really appropriate for the government to outlaw a revenue model that people have clearly revealed themselves to prefer to direct user fees?
The surveillance of this scale isn't necessary. I'm not against serving me ads based on the current web page I'm on right now. Or based on the current email or search, since the provider has access to that anyway (unless it's e2e). Or make a profile of me based on a voluntary questionnaire.
Some companies work like that and they survive just fine. It's absolutely not necessary to collect every little bit of detail of my life to serve me ads. It's only the predatory companies that do that, and especially the multi-trillion corporations.
Furthermore, those "free" services in exchange for user data may not even be good. Take Google, how they push everything that serves their needs, even if better alternatives are available (or were, before they were smothered).
I.e. crappy quality of Google search is well documented, Chrome no comment, Drive is pushed so hard that you can't get a Pixel phone with decent storage and most phones don't offer memory cards because Google makes it difficult... Etc.
So yea, I'm totally for limiting the collection of data to the barest minimum. There's literally no downsides to anybody except to the dystopian corporations.
Ed: that's not even mentioning all the dark patterns these corpos use to sign you up, or how you can't opt out or you have no choice because of monopolies. That's not "choosing" or "agreeing", that's extortion.