EU competition chief holds threat of breaking up Google(telegraph.co.uk)
telegraph.co.uk
EU competition chief holds threat of breaking up Google
https://www.telegraph.co.uk/technology/2018/03/25/eu-competition-chief-keeps-threat-breaking-google-table/
89 comments
"I can understand the hatred many people here have toward Standard Oil or other big gigantic life-controlling entities.
The step to remove Standard Oil dominance is to find, create and nurture alternatives. For example, I started buying petroleum from a small independent refiner. I'm using some of Royal Dutch Oil Company products like their lubricants and ointments. I'm using whale oil for indoor lighting.
So I'm diversifying a bit though they can engage in price fixing. This reduces the monopoly power of one single entity.
Blocking Standard Oil, Royal Dutch or another big provider will not work and if it did, it can have severe consequences. Most people (and politicians) are ignoring the massive productivity benefits that Standard Oil is bringing. It can be used for evil, but the productivity it brings is paramount.
You can't fight Standard Oil by blocking it or destroying it. There is a reason that Standard Oil is huge: It is magical and there is no usable alternative.
To remove Standard Oil monopoly you did what Standard Oil did for the Cleveland or Pittsburg cartels: You build an alternative. It is possible to have multiple alternatives for oil like for steel or railroads (though we have only two).
The reason we don't? Standard Oil won. Carnegie Steel won. North Pacific won. Everybody gave up and just accepted it. Now everyone is screaming of "regulating" these guys. Trust me. This how you get closer to your demise (politicians and current day governments) than to their demise."
The step to remove Standard Oil dominance is to find, create and nurture alternatives. For example, I started buying petroleum from a small independent refiner. I'm using some of Royal Dutch Oil Company products like their lubricants and ointments. I'm using whale oil for indoor lighting.
So I'm diversifying a bit though they can engage in price fixing. This reduces the monopoly power of one single entity.
Blocking Standard Oil, Royal Dutch or another big provider will not work and if it did, it can have severe consequences. Most people (and politicians) are ignoring the massive productivity benefits that Standard Oil is bringing. It can be used for evil, but the productivity it brings is paramount.
You can't fight Standard Oil by blocking it or destroying it. There is a reason that Standard Oil is huge: It is magical and there is no usable alternative.
To remove Standard Oil monopoly you did what Standard Oil did for the Cleveland or Pittsburg cartels: You build an alternative. It is possible to have multiple alternatives for oil like for steel or railroads (though we have only two).
The reason we don't? Standard Oil won. Carnegie Steel won. North Pacific won. Everybody gave up and just accepted it. Now everyone is screaming of "regulating" these guys. Trust me. This how you get closer to your demise (politicians and current day governments) than to their demise."
Those Rockafellers are doing just fine even today after Standard Oil was broken up.
In telecommunications, the Baby Bells are doing just fine after the Bell Telephone Co. was broken up. They're just as monopolistic, price fixing, and destructive to privacy as ever.
In telecommunications, the Baby Bells are doing just fine after the Bell Telephone Co. was broken up. They're just as monopolistic, price fixing, and destructive to privacy as ever.
> Those Rockafellers are doing just fine even today after Standard Oil was broken up.
Yes, it took a long time to break up Standard Oil, leaving plenty of time for the Rockefellers to amass wealth. What's your point?
Yes, it took a long time to break up Standard Oil, leaving plenty of time for the Rockefellers to amass wealth. What's your point?
> In telecommunications, the Baby Bells are doing just fine after the Bell Telephone Co. was broken up.
And they are mostly back together again, too.
And they are mostly back together again, too.
The step to remove Google dominance is to find, create and nurture alternatives.
Until Google's search results page for what you want to do decides to "promote" Google's own solution and "penalize" the competitor.
Which is something Google already does. They claim to have only the best and purest and most angelic of intentions, but the result is still strongly anti-competitive behavior and makes competing with Google a task that ranges from merely "obscenely difficult" all the way up to "actually impossible".
Until Google's search results page for what you want to do decides to "promote" Google's own solution and "penalize" the competitor.
Which is something Google already does. They claim to have only the best and purest and most angelic of intentions, but the result is still strongly anti-competitive behavior and makes competing with Google a task that ranges from merely "obscenely difficult" all the way up to "actually impossible".
Why not apply the existing rules against monopolies and anti competitive actions, what changed since Microsoft almost was broken up?
IMO is not competitive to have Google with it's advertising money get involved in 10 or more different activities and killing the companies that were or would have appeared there just because they have money and can run without profit.
IMO is not competitive to have Google with it's advertising money get involved in 10 or more different activities and killing the companies that were or would have appeared there just because they have money and can run without profit.
Because it's not actually a monopoly. Monopoly means no competition. "Monopoly" just means "big" now apparently.
Are you sure Google is not a monopoly in search, even if is not a monopoly there are still rules on abusing a dominant position in one market. Microsoft abused the OS dominance to push a web browser, Google is doing similar things now but for some reasons the US government closes it's eyes on it.
(ex I should not see on a Google search results links to download Chrome, or to google products, or Google competitor disappearing from first page results)
Could you elaborate on why you see it irreplaceable? I don't see how that reconciles with your personal examples of alternative tools?
I, similarly, use Apple Maps more than Google Maps now, Messenger or iMessage more than Hangouts, and don't feel like things would be too terrible if I had to go further into Outlook.com or iCloud instead of Gmail/Calendar... Google's versions are better but not in a way that seems magical or impossible to replace (from my experience with my work email/calendar in Outlook).
I, similarly, use Apple Maps more than Google Maps now, Messenger or iMessage more than Hangouts, and don't feel like things would be too terrible if I had to go further into Outlook.com or iCloud instead of Gmail/Calendar... Google's versions are better but not in a way that seems magical or impossible to replace (from my experience with my work email/calendar in Outlook).
I actually found most of Google tools to be sub-bar. I only use Google search and I find that irreplaceable.
Does the EU even have the authority to break up Google/Alphabet?
The EU effectively has the authority to decide who can do business in Europe. So Google/Alphabet presumably could refuse an EU breakup order, but they'd have to more or less exit business in Europe, including all of their various offices there. Both a lot of profit and talent left on the table.
Someone much smarter than me would likely have to determine whether stockholders benefit more from a split up company that can do business in Europe, or a unified company that can't.
Someone much smarter than me would likely have to determine whether stockholders benefit more from a split up company that can do business in Europe, or a unified company that can't.
The political backlash could make such a withdrawal rather temporary. Which would IMO push Google into staging such a withdrawal.
It would be quite a bold move. Alternatives exist, and it's very much contrary to Google's interest that people try it, and people will try it if Google stops working.
These things take some time. They could add a banner saying they are shutting down in say 6* weeks with a link saying they are exploring options while trying to comply etc etc.
With 6 weeks being the required notice before everyone is laid off or whatever.
With 6 weeks being the required notice before everyone is laid off or whatever.
What backlash? Save from a well run PR and lobby campaign by Google, few consumers would mind.
You're kidding, right? You don't think people would be upset when they cannot access Gmail, Google search results, or Google Maps? And a message in each service asking users to contact their representatives if they want access to the services again would be all that is required.
That would be a very unlikely consequence of breaking up Google.
You're kidding right? You don't think people would be upset when they cannot access their funds though their favored stock broker or bank? Each bank would lobby their customers to contact their representatives. They're too big to fail! They're too integral to the economy to consider even breaking them up. /s
I'm not suggesting that Google isn't a monopoly or that it shouldn't be broken up. I'm suggesting that Google could withhold services from the EU instead of agreeing to be broken up. Unlike a bank where its customers could demand their money back, Google owes its users nothing.
Hmm that's an interesting point. However, much like a bank needs customers doesn't Google need users? I find it not very persuasive that withholding an entire continent of users would result in much more than an empty threat on Google's part. If Google can't service Europe, then Europe would develop its own services, much like China has, a terrifying prospect for both American foreign policy and Google's future prospects. Perhaps Europe would even turn to Baidu. I don't think that would happen, but the threat would be alarming to Google's negotiators.
EU law considers a citizen's data their personal property (akin to a bank holding a citizen's money), and Google is holding a lot of it. Google could get into significant additional legal trouble depending on the method they chose to withdraw their services.
Well we know how people would react, because it happened before when Google was forced out of China.
Everyone there uses a local alternative and doesn’t give a fuck about Google anymore
Everyone there uses a local alternative and doesn’t give a fuck about Google anymore
that's BS, Google wasn't anywhere near as widespread in China as it is in Europe.
which is also why Google was fine with leaving China
which is also why Google was fine with leaving China
What percent of the EU uses Gmail? Right off that bat, that's a massive inconvenience.
Could such a breakup order or sanctions be specific to certain businesses?
Google has a strong position in the email space, but it isn't anywhere as dominant as it is with search and web advertising.
Google has a strong position in the email space, but it isn't anywhere as dominant as it is with search and web advertising.
> Google has a strong position in the email space, but it isn't anywhere as dominant as it is with search and web advertising.
What?? The whole point of a breakup is precisely because they are dominant in all of the things you mentioned. Also, my comment is irrelevant if they actually comply with a breakup order. If they don't, and they withdraw from the EU, it doesn't matter how the breakup is structured because they cease doing business in the EU anyway.
What?? The whole point of a breakup is precisely because they are dominant in all of the things you mentioned. Also, my comment is irrelevant if they actually comply with a breakup order. If they don't, and they withdraw from the EU, it doesn't matter how the breakup is structured because they cease doing business in the EU anyway.
Spain tried it. It started with a bang like this [1] and ended with a whimper like this [2].
[1] https://www.theguardian.com/world/2014/dec/16/google-news-sp...
[2] https://techcrunch.com/2014/12/14/spanish-newspapers-want-go...
[1] https://www.theguardian.com/world/2014/dec/16/google-news-sp...
[2] https://techcrunch.com/2014/12/14/spanish-newspapers-want-go...
I don't think a minor scuffle about Google News, a product Google's profits aren't dependent on, and user data isn't contained in, is a relevant comparison to discussion of what would happen if a search/email-level breakup was in the cards.
I just mean that Ms. Vestager is not the only one who can play hardball or rattle sabers here. Google can and has done it in the past.
What happens to people's emails in Gmail if they exit business in Europe? Surely people won't just be cool with their leaders making them lose access to their emails?
EDIT: I guess I didn't mean "what if Google was forced to do this overnight?", but rather I meant more like "couldn't Google make this backfire by doing this overnight?".
EDIT: I guess I didn't mean "what if Google was forced to do this overnight?", but rather I meant more like "couldn't Google make this backfire by doing this overnight?".
I am actually pretty sure that Google will not exit business in Europe. And even if it does happen, I am sure that not all of Google will vanish from Europe overnight and people will be able to download all their data.
Google offers Takeout today which lets you download your data.
Good luck finding somewhere else you can reimport that and continue working. It might as well be an encrypted blob.
Good luck finding somewhere else you can reimport that and continue working. It might as well be an encrypted blob.
I think it would be more like Google couldn't sell advertising to European companies, nor provide other paid services like licensing and the sort.
It probably wouldn't happen over night, there would be some time to get data out of google. Taking into account that gmail is still accessible by IMAP I guess there would be a plenty of other providers who would offer transfer of your emails from Google to a new email account.
That's one part of the negotiation puzzle. EU would want it's citizens to retain access to their google-hosted emails.
Legally speaking, I'm sure there's plenty of ways the EU can force Google to do things it currently does not want to do.
I'd say the EU has lots of negotional angles currently to win things from Google. That is kind of what you get when you have more or less universal legislation power over 40% or so of the world's purchasing power (please correct me, I just bullshitted that guess). And that, alas, was also a large part of why the EU was born. So now we'll will reap the benefits.
If I could say anything to our EU negotiators in this case, it would be: stay brave.
Legally speaking, I'm sure there's plenty of ways the EU can force Google to do things it currently does not want to do.
I'd say the EU has lots of negotional angles currently to win things from Google. That is kind of what you get when you have more or less universal legislation power over 40% or so of the world's purchasing power (please correct me, I just bullshitted that guess). And that, alas, was also a large part of why the EU was born. So now we'll will reap the benefits.
If I could say anything to our EU negotiators in this case, it would be: stay brave.
> That is kind of what you get when you have more or less universal legislation power over 40% or so of the world's purchasing power (please correct me, I just bullshitted that guess).
Europe GDP is 20.9 Trillion USD. The world GDP is 107 Trillion USD. So Europe is only 20% of the world GDP.
But one can make the argument that EU citizens are better connected and spend more on digital goods. Though I'd be surprised if it drives more than 30% of Google revenue.
Europe GDP is 20.9 Trillion USD. The world GDP is 107 Trillion USD. So Europe is only 20% of the world GDP.
But one can make the argument that EU citizens are better connected and spend more on digital goods. Though I'd be surprised if it drives more than 30% of Google revenue.
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Alphabet Inc. break their revenue down into:
EMEA, APAC, Other Americas, US
Out of this, in 2017, EMEA was 32.5% of total revenue, based on numbers from page 33 of https://abc.xyz/investor/pdf/20171231_alphabet_10K.pdf.
My bullshit-guess is that out of those 32.5 percent units, EU/EES was responsible for about 31 units or so, and the rest 1.5 was from the middle east and africa. (Reasoning: the ME certainly has money, but no population to speak of. Africa has lots of people but besides relatively tiny South Africa very little revenue for Google.)
So yeah, the EU has a pretty powerful hammer.
EMEA, APAC, Other Americas, US
Out of this, in 2017, EMEA was 32.5% of total revenue, based on numbers from page 33 of https://abc.xyz/investor/pdf/20171231_alphabet_10K.pdf.
My bullshit-guess is that out of those 32.5 percent units, EU/EES was responsible for about 31 units or so, and the rest 1.5 was from the middle east and africa. (Reasoning: the ME certainly has money, but no population to speak of. Africa has lots of people but besides relatively tiny South Africa very little revenue for Google.)
So yeah, the EU has a pretty powerful hammer.
Let me ask you: If Google closed everyone's Gmail accounts overnight to make a political statement, even if the EU relented, how many customers would stay with Google after that? There are limits to how much Google can punish users for their countries' legal decisions without risking losing those users forever.
Not many, but if they see not being broken up as fundamental to their business model working (I don't know if they do, but I could imagine Gmail not making much money on its own might pose problems), it might not make that much of a difference for them.
Probably not directly. Indirectly though that can do lots of things. Google will find it hard to sell ads if their salesmen are not allowed to physically enter the EU (and the ones currently in the EU are told their job is illegal - though how that works is an open question). In short the EU do lots of things to harass the EU operations until they decide they have to break up.
The EU has the authority to break up the Alphabet subsidiaries (including indirect subsidiaries) operating in the EU, and the authority to require a breakup as condition of allowing any of the rest of Alphabet to do business in any form in the EU.
I don't think they really can. Effectively, they'd have to block Google in the EU. Otherwise, Google can technically just stay in the U.S. and sell services. Ad's don't have to be location based, pretty sure a lot of advertising is elicit materials (such as porn) anyway - which already may not be allowed.
Unless you stop people from just heading to the top search engine in the world, they'll keep using it.
Unless you stop people from just heading to the top search engine in the world, they'll keep using it.
There are several things the EU can do. First of all, they can freeze and/or seize Google's assets in Europe. Like bank accounts and real estate. Or even more important to Google, all of their European datacenters.
The EU can also disallow sales of Google's products, like any android phone. Or products like the chromecast, and don't forget Nest and Google Home.
And selling ads in Europe from a foreign country isn't too easy either. It is a lot harder to do business with a company which is on the other side of the ocean, and officially doesn't have a precense in the same economic area.
If Google leaves all of that behind in Europe, and is not really allowed to do business in Europe anymore, soon enough there will be a competitor that stands up and can do things better. Especially if they can actually open offices in Europe and do business without major hurdles.
The EU can also disallow sales of Google's products, like any android phone. Or products like the chromecast, and don't forget Nest and Google Home.
And selling ads in Europe from a foreign country isn't too easy either. It is a lot harder to do business with a company which is on the other side of the ocean, and officially doesn't have a precense in the same economic area.
If Google leaves all of that behind in Europe, and is not really allowed to do business in Europe anymore, soon enough there will be a competitor that stands up and can do things better. Especially if they can actually open offices in Europe and do business without major hurdles.
> There are several things the EU can do. First of all, they can freeze and/or seize Google's assets in Europe. Like bank accounts and real estate. Or even more important to Google, all of their European datacenters.
> The EU can also disallow sales of Google's products, like any android phone. Or products like the chromecast, and don't forget Nest and Google Home.
Without giving them plenty of time to pullout? This will probably trigger panic across of the multinationals.
> The EU can also disallow sales of Google's products, like any android phone. Or products like the chromecast, and don't forget Nest and Google Home.
Without giving them plenty of time to pullout? This will probably trigger panic across of the multinationals.
> Without giving them plenty of time to pullout?
These things take a long time. Google was abusing its search monopoly before the EU started a seven-year investigation that resuled in a $2.7 billion fine ... which it is now appealing.
Google settled with the US in 2013. It agreed to change some of its search practices and got away without a fine.
I'd be surprised if Google didn't know it was abusing its search monopoly. I'd assume it calculated that it was more profitable to keep doing it until compelled to stop.
Either way, a seven-year investigation provides plenty of time to prepare for exit strategies, if required, and it would grossly incompetent not to have prepared for them.
These things take a long time. Google was abusing its search monopoly before the EU started a seven-year investigation that resuled in a $2.7 billion fine ... which it is now appealing.
Google settled with the US in 2013. It agreed to change some of its search practices and got away without a fine.
I'd be surprised if Google didn't know it was abusing its search monopoly. I'd assume it calculated that it was more profitable to keep doing it until compelled to stop.
Either way, a seven-year investigation provides plenty of time to prepare for exit strategies, if required, and it would grossly incompetent not to have prepared for them.
I say that blocking google in EU would actually be a good thing for a consumer. It would force people to try out alternatives (which do exist).
Google currently has a monopoly for search, email, maps (and many other services which I care less about) it is crazy that we allowed it to happen.
It's not too far fetch that Google pretty much owns the internet. If Google blocks you or your company you might as well not exist.
There never should be a single entity that has so much power.
Google currently has a monopoly for search, email, maps (and many other services which I care less about) it is crazy that we allowed it to happen.
It's not too far fetch that Google pretty much owns the internet. If Google blocks you or your company you might as well not exist.
There never should be a single entity that has so much power.
If the EU forced Google to breakup search, email, and maps, (and assuming they're monopolies now) why wouldn't those continue to be monopolies?
There’s a simple trick known as asking the banks where Google keeps their money to freeze those assets.
And that place is called the US.
This didnt even work when it was simply a question of having transnational companies on the level of facebook having to pay taxes.
This didnt even work when it was simply a question of having transnational companies on the level of facebook having to pay taxes.
And then there’s other solutions you can do.
E.g., seizing Google’s copyrights and patents, and selling EU usage rights for them. Or seizing the physical hardware, and selling them (and the software on them) off.
There’s many many solutions here.
In the past, european governments have already seized airplanes from airlines upon landing, and threatened to auction them off, to pay a single unpaid $500 ticket return fine.
E.g., seizing Google’s copyrights and patents, and selling EU usage rights for them. Or seizing the physical hardware, and selling them (and the software on them) off.
There’s many many solutions here.
In the past, european governments have already seized airplanes from airlines upon landing, and threatened to auction them off, to pay a single unpaid $500 ticket return fine.
> E.g., seizing Google’s copyrights and patents, and selling EU usage rights for them. Or seizing the physical hardware, and selling them (and the software on them) off.
The retaliation from the US government on that one would be pretty epic. I wouldn't want to be an owner of a patent heavy European company at that point. Our current President is quite familiar with eminent domain.
The retaliation from the US government on that one would be pretty epic. I wouldn't want to be an owner of a patent heavy European company at that point. Our current President is quite familiar with eminent domain.
What's the trade balance with IP between the US and the EU? Whichever side is benefiting from that the most, also has the most to lose
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Actually, AFAIK Google still stashes most of it's European profits with a Caribbean island to avoid the taxes of bringing it back to the US. I know Apple's announced a plan to bring their money back in, but I don't know if Google has yet. With the current tax deal in place, they have little reason not to.
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Blocking companys and growing ones own version of them, worked well for nearly every country who did it. (China, South Korea, Japan). Its a miracle the EU did this not earlier, and i guess Trumps punitive tariffs encourage dreams in some well-bribed politicians, to look for new sources of income by growing there own it-giants.
It can ban them from operating in the EU unless they break up. The U.S. can also just break them up without a threat of banning them to get there. But certainly the EU have plenty of leverage.
EMEA region brings roughly 30% of the revenue for Alphabet.
EU alone probably 25% of that. US is 47%.
For a company that benefits from network externalizes a much as Alphabet does, revenue alone is not good measure of market importance. Losing one market means that market share in all markets is threatened and company growth is in peril.
In practice EU probably will not explicitly demand company break up. They wold create conditions that effectively break up the company inside EU. It's up to the owners to decide how they arrange it in the practice.
First Alphabet might have to choose what its main business is (= search) then all other businesses and services are separated from the search into different entities when they operate inside EU or serve customers inside EU. This would include Google Play, Youtube, Android, user accounts, ad placements, and ad sales generated from the EU.
This would break the platform synergy. Negotiators might leave carrots that make it easier for Alphabet preserve it's stock valuation if it rolls over and yields to most demands.
For a company that benefits from network externalizes a much as Alphabet does, revenue alone is not good measure of market importance. Losing one market means that market share in all markets is threatened and company growth is in peril.
In practice EU probably will not explicitly demand company break up. They wold create conditions that effectively break up the company inside EU. It's up to the owners to decide how they arrange it in the practice.
First Alphabet might have to choose what its main business is (= search) then all other businesses and services are separated from the search into different entities when they operate inside EU or serve customers inside EU. This would include Google Play, Youtube, Android, user accounts, ad placements, and ad sales generated from the EU.
This would break the platform synergy. Negotiators might leave carrots that make it easier for Alphabet preserve it's stock valuation if it rolls over and yields to most demands.
https://www.nytimes.com/2017/08/30/us/politics/eric-schmidt-...
I wonder if this contributed to Eric Schmidt leaving.
I wonder if this contributed to Eric Schmidt leaving.
Vestager is using the bully pulpit of an EU commissioner to further her political ambitions and it is already starting to grate on her allies in the EU. She is beginning to significantly overstep her bounds and is risking a powerful backlash. Right now, everyone is blaming big tech for all the world's ills, and she is jumping on the bandwagon. But the public is very fickle. If the American and European populists realize the potential to paint Vestager as the poster child for elite globalism and really start to nitpick at her inconsistencies and political ambitions, she will not only have given Trump some very real ammunition for further US/EU conflict but may sow the seeds for additional internal EU strife.
Honestly comes across as EU sour grapes. The "competition chief" should focus on the regulations that have resulted in low investment and slow innovation instead of trying to "regulate" American tech companies.
You mean like VW being called out in the United States for the diesel scandal was US sour grapes?
Really, I'm all for symmetry with stuff like this if that is what it takes to get these giants to at least attempt to comply with the law.
Really, I'm all for symmetry with stuff like this if that is what it takes to get these giants to at least attempt to comply with the law.
Were there other smoking gun cases of carmakers detecting emissions tests to alter car behavior?
Yes – there was an original report implicating VW, but the same report implicated 5 other companies equally, including GM, Ford, and 3 European carmakers (plus, ofc, VW).
Symmetry was fining Google. The EU fined Google $2.7 billion.
What would symmetry look like from the US side if the EU starts demanding Google be broken up? Unfortunately the EU has no massive, powerful technology businesses to demand be broken up.
What would symmetry look like from the US side if the EU starts demanding Google be broken up? Unfortunately the EU has no massive, powerful technology businesses to demand be broken up.
> Unfortunately the EU has no massive, powerful technology businesses to demand be broken up.
So?
If it had then most likely there would be a similarly strong push to break up such a company if it misbehaved. At least, I would hope so.
Microsoft got very lucky with the change of party in charge, they were about to be broken up in the US into 'apps' and 'os'.
And that's a good punishment for companies that use the fact that they have their fingers in completely different pies to stifle the competition.
Breaking up VW would not accomplish much in that sense.
So?
If it had then most likely there would be a similarly strong push to break up such a company if it misbehaved. At least, I would hope so.
Microsoft got very lucky with the change of party in charge, they were about to be broken up in the US into 'apps' and 'os'.
And that's a good punishment for companies that use the fact that they have their fingers in completely different pies to stifle the competition.
Breaking up VW would not accomplish much in that sense.
> Unfortunately the EU has no massive, powerful technology businesses to demand be broken up.
Maybe because the EU has working competition laws, so EU companies rarely tend to hold a monopoly in dozens of independent markets?
I mean, that’s the basic issue here, isn’t it? The US hasn’t had effective antitrust regulation for decades, which is why Google ever could grow to this size in the first place.
Maybe because the EU has working competition laws, so EU companies rarely tend to hold a monopoly in dozens of independent markets?
I mean, that’s the basic issue here, isn’t it? The US hasn’t had effective antitrust regulation for decades, which is why Google ever could grow to this size in the first place.
Which regulations have "resulted in low investment and slow innovation"?
High tax rate and difficulty of firing someone would be my two guesses
Difficulty firing someone makes people feel secure at work. Security is one of the essential things you need to be innovative. Desperation and anxiety doesn't drive innovation.
Perceived difficulty in firing causes much more cautious hiring. If I told you that the next car you buy, you'd have to use for 10 years with no options for a change, you'd certainly pick differently than you do now, knowing you could always replace it.
I encourage you to maybe go the the EU at some point in your life (and have some meaningful interaction with corporate life there). That will demonstrate to you that the sentiment you're addressing is patently false: Companies in the EU vigorously and constantly hire new people, even though employees have rights.
The tax rate is broadly comparable to the US. Tech companies’ success is therefore based on their ability to fire people without cause?
Honestly, this sort of thing is often thrown around as a trope and I don’t think it holds much water.
Honestly, this sort of thing is often thrown around as a trope and I don’t think it holds much water.
which particular tax rate?
Not regulations, incompatible regulations.
If you create a startup in SV, you can easily sell to the whole US.
In the EU, you’ll need to obey 28 different laws, 28 different standards, and file 28 different tax forms. This is currently the single biggest hurdle for startups in the EU.
The second, of course, is that people seem less willing to throw billions at risky concepts just so one maybe gets big enough.
If you create a startup in SV, you can easily sell to the whole US.
In the EU, you’ll need to obey 28 different laws, 28 different standards, and file 28 different tax forms. This is currently the single biggest hurdle for startups in the EU.
The second, of course, is that people seem less willing to throw billions at risky concepts just so one maybe gets big enough.
Well, that’s not regulation. In general, to sell across the EU, you have to comply with the regulations of the single market. That’s largely harmonised; there’s some friction, but it’s not anything like dealing with 28 totally independent countries. It’s surprisingly easy to sell so the whole EU market.
Different social attitudes to risk, and a language barrier, are no doubt much more pressing concerns.
Different social attitudes to risk, and a language barrier, are no doubt much more pressing concerns.
If the field you’re selling in is already harmonised, if you only have employees in one country, and if you have someone else do the VAT for you.
All these can be potential roadblocks that make it harder.
All these can be potential roadblocks that make it harder.
This happens in the US with state regulations already. The federal government creates floors on behavior, the states can add regulations on top of those.
The real difference is that the EU and it's member nations actually enforce their regulations and don't let situations happen like Uber/ISPS/AirBnB just ignoring laws until they had enough money/influence to force changes to the regulations
The real difference is that the EU and it's member nations actually enforce their regulations and don't let situations happen like Uber/ISPS/AirBnB just ignoring laws until they had enough money/influence to force changes to the regulations
> The real difference is that the EU and it's member nations actually enforce their regulations and don't let situations happen like Uber/ISPS/AirBnB just ignoring laws until they had enough money/influence to force changes to the regulations
I mentioned this in a sibling comment – a good example is the EU enforcing VAT laws actually, vs. in the US many online stores simply being located in a state without sales tax and not paying any in the state where the customer lives either.
I mentioned this in a sibling comment – a good example is the EU enforcing VAT laws actually, vs. in the US many online stores simply being located in a state without sales tax and not paying any in the state where the customer lives either.
Given how much of EU's economic law is managed centrally, is this drastically more significant than say... the 50 different states' regulations that US companies have to follow and contend with?
I’m not quite sure, but I know that in the US many companies "forget" about sales tax if they’re located in a state without, without much trouble.
In the EU, VAT compliance can definitely become an issue, especially with small projects.
Not so much an issue for VC startups, but definitely one for bootstrapped ones. The only way to get a large enough market to survive is to sell to the entire EU, but that means much more work with VAT compliance, and translations.
In the EU, VAT compliance can definitely become an issue, especially with small projects.
Not so much an issue for VC startups, but definitely one for bootstrapped ones. The only way to get a large enough market to survive is to sell to the entire EU, but that means much more work with VAT compliance, and translations.
The step to remove Google dominance is to find, create and nurture alternatives. For example, I started using Fastmail. I'm using some of Apple products like the Calendar and Notes. I'm using Skype for communication.
So I'm diversifying a bit though they can engage in data sharing. This reduces the monopoly power of one single entity.
Blocking Google, Facebook or another big provider will not work and if it did, it can have severe consequences. Most people (and politicians) are ignoring the massive productivity benefits that Google search is bringing. It can be used for evil, but the productivity it brings is paramount.
You can't fight Google by blocking it or destroying it. There is a reason that Google is huge: It is magical and there is no usable alternative.
To remove Google monopoly you did what Google did for Yahoo or Bing: You build an alternative. It is possible to have multiple alternatives for search like for email or smartphones (though we have only two).
The reason we don't? Google won. Android/iOS won. Linux/Windows won. Everybody gave up and just accepted it. Now everyone is screaming of "regulating" these guys. Trust me. This how you get closer to your demise (politicians and current day governments) than to their demise.