Advocates for regulating behaviorally targeted advertisements tend to focus on ethical and legal justifications for regulation. Meanwhile, the advertising technology industry has staunchly opposed regulation by drawing on economic arguments, contending that such regulation would be harmful to advertisers, consumers, publishers, and data intermediaries alike—ultimately undermining innovation and accessibility of free products across the Internet. In this Article, we analyze the theoretical and empirical economic literature on the costs and benefits of privacy regulation in the context of behavioral advertising in order to evaluate the strength of economic arguments for and against regulation. Our analysis suggests that recent enforcement actions against ad-technology firms and movements across the world for online privacy regulations may be justifiable not merely on ethical or moral grounds, but on economic grounds. We show that current economic arguments used by the ad industry to oppose privacy regulation are poorly substantiated, and therefore do not outweigh valid legal and ethical justifications for privacy regulation. Furthermore, there are valid theoretical and empirical economic justifications for regulating behavioral ads. Rather than resulting in a loss of welfare for consumers, regulation may produce a reduction of harms and a more balanced allocation of the costs and benefits of data accumulation. Still, future economic work must move from analyzing narrow micro-level effects to research designs that are both rigorous and encompassing, allowing for a fuller understanding of impacts across stakeholders to more effectively inform privacy regulation.