7 ms·

This is one of the reasons why the IT industry in the EU is so weak when compared to the US. As a citizen of an EU state I can't help but feel that we are here

This is one of the reasons why the IT industry in the EU is so weak when compared to the US. As a citizen of an EU state I can't help but feel that we are here governed by complete morons.

jstalin 11y ago
More regulation begets more regulation. You can't expect bureaucrats who have been given authority over something to sit back and decide when they're done regulating.
- wpietri 11y ago
  I wouldn't totally blame the bureaucrats here, either. They're sort of like sysadmins: people only pay attention to them when something bad is happening, and that attention is rarely positive. Whereas when things are going well, nobody says, "Thank goodness for the bureaucrats that keep things running smoothly." Their incentives are mostly toward over-regulating. If they over-regulate, they mainly harm invisible potential improvements. Whereas if they under-regulate, the big, obvious failures mean they get in a lot of hot water.
  - tobltobs 11y ago
    VAT MOSS did not only harm invisible potential improvements. It makes thousands of small business economically unviable. Same will be true for the new Oettinger law.
    - charlesdm 11y ago
      To be honest, VAT MOSS was introduced because large (American) companies were gaming the system by routing sales through Luxembourg to avoid significant amounts of VAT. It is nothing more than a counter tax avoidance measure.
      - tobltobs 11y ago
        That does not make this stupid law any better. They could have forced Luxembourg to adapt there laws to a more common standard. They could have made an exemption for small amounts.
        charlesdm 11y ago
        The EU generally doesn't involve itself in the running of individual member states. They create directives that need to be translated to local law, but member states are free to do so as they wish within a certain framework. As far as I know, they don't force minimum tax rates - that's a freedom of a member state. That's also why you pay 33% corporate tax in Belgium and 5% in Malta.
        drx 11y ago
        The EU has set the minimum standard VAT rate as 15%.
      - Silhouette 11y ago
        It is nothing more than a counter tax avoidance measure. Unfortunately, it is something more than a counter tax avoidance measure, because it has caused vast collateral damage. It's a huge administrative burden that literally makes many micro-businesses unviable, and it imposes prohibitive overheads on slightly larger businesses that are just getting going. To add insult to injury, it's also impossible in practice to comply with the rules fully even if you make a good faith effort, unless you have a specialist VAT accountant's level understanding of each EU member state's tax system. Obviously no business except for large multinationals actually has this level of understanding available to it. What is particularly appalling in this case is that the authorities who spent all that time working on the new rules didn't even realise all those smaller businesses existed until the very end. A huge campaign against the new measures was started with just weeks to go. Most of the authorities across all levels of government pointed to years of discussions, said they consulted earlier, and asked why the small businesses didn't say anything before. It didn't even occur to them that the microbusinesses didn't know, because no-one had thought to contact them, unlike larger businesses with well-established VAT management, and because someone running a £500/year side business from their kitchen table to fund their kids' christmas presents might not be following the intricate details of EU tax negotiations. The icing on the cake is the often dysfunctional systems put in place to administer the new systems, which have made it very clear that even the national tax authorities often don't know what they're doing. Case in point: Multiple national tax authorities have already sent waves of wildly incorrect and extremely hostile demands for payment of supposedly unpaid VAT to small businesses in other countries. Imagine how you'd feel if you spent a year building up a side business, then one morning you woke up to a demand for over a million Euros, far more money than you'd ever made in your year of trading, saying if you didn't pay faster than you could sensibly get legal or tax advice then you'd be taken to court without further notice, inevitably killing your business. This is the reality when the EU gets to play with legal and tax rules but the people making the rules fail to understand the basic nature of how those rules will affect smaller businesses or individual citizens who aren't over there playing the games with the politicians. It's a scary prospect, and the way forward some of the EU bureaucrats see for the Internet and for intellectual property as we're discussing today seems many times worse than the short-sightedness they showed with the VAT mess a year ago.
    - undefined0 11y ago
      I had to stop working on a website which was soon to launch when I learned about VAT MOSS. Although, I was thinking whether a faucet-style (india/russia/romania workers) website could pay people $N per email to send the digital good/service manually. Then that should bypass the VAT MOSS legislation, right? Although, they do have plans to apply VAT MOSS to physical goods/services in 2016. It's a pain in the ass.
cLeEOGPw 11y ago
How are EU regulations holding EU IT industry back?
- pvdebbe 11y ago
  Regulations by definition are for holding rapidly advancing industries back, for various reasons.
  - AnthonyMouse 11y ago
    Good regulations have almost nothing to do with technological change. We have regulations against pollution or fraud not because the technology has changed but because the incentives otherwise don't line up. You can pollute the air using technology from 1895 and if it's cheaper to do that than to install emissions controls then economics will drive you to do that unless regulations prohibit it. Regulating very new technologies is almost always unwise. There will already be existing generic laws and regulations against serious bad outcomes (you are not allowed to knowingly kill people regardless of method) and for less serious outcomes it's generally better to let the technology shake out and take some time to study and understand it, even if there is a short-term cost to doing that.
    - pvdebbe 11y ago
      Well I'm thinking along the lines, "low-polluting equipment is most likely more expensive => the company is held slightly back by demanding new standards". Maybe some regulation is needed, some is not. And all of it is by definition against the company. But not necessarily against the society as a whole.
  - tormeh 11y ago
    That's just plain wrong.
- tobltobs 11y ago
  E.g. you want to sell digital goods in the EU? Check VAT MOSS. You can't find a EU law which will be a show stopper for you? No problem, there will be a national law which kills your business idea.
tluyben2 11y ago
It might be one of the reasons but not one of the biggest imho. The risk avoiding nature we seem to have picked up, the shame in failure (bankruptcy in the EU is often a life altering disgrace) and the draw towards comfort, free time and family life over making a billion Euro company seem to be bigger drivers as I see it.
- tobltobs 11y ago
  Cookie law, VAT MOSS, Abmahnungen and now the Öttinger tax. Even if you don't care about the risk, you would be stupid to found a startup in a EU country.
  - noir_lord 11y ago
    All bad things but also they brought in strong privacy protections, held national governments to account for privacy invasions, have broadly stronger environment and safety legislation that most other regions. The EU isn't all good or all bad it's just huge.
    - tobltobs 11y ago
      "strong privacy protections ..", what do you mean? The Cookie law? "held national governments to account for privacy invasions"? They are sending our data to the US (e.g. data for airline passengers). "have broadly stronger environment and safety legislation" Maybe on paper, the EU agencies did know for years that VW (and other EU car producer) did cheat.
      - noir_lord 11y ago
        http://www.independent.co.uk/life-style/gadgets-and-tech/news/eu-rules-uks-porn-filters-are-illegal-a6711756.html http://www.independent.co.uk/life-style/gadgets-and-tech/new... (ruled default filters where illegal) http://europa.eu/rapid/press-release_STATEMENT-15-5654_en.htm http://europa.eu/rapid/press-release_STATEMENT-15-5654_en.ht... (ECJ overruled blanket Data Retention). http://www.wsj.com/articles/eu-court-strikes-down-trans-atlantic-safe-harbor-data-transfer-pact-1444121361 http://www.wsj.com/articles/eu-court-strikes-down-trans-atla... (safe harbour struck down). Specific instances show there are problems but all large scale human systems are messy. Yeah the EU isn't perfect but nothing is, I'd sooner my country (the UK) was in it than not though.
fsloth 11y ago
All governments protect incumbent players with large enough vested interests - if they yell loud enough. I think you view US through rose tinted glasses - go ask Elon Musk what he thinks of the laws protecting car dealerships there.
- deleted 11y ago
  [deleted]
- quanticle 11y ago
  Or what Travis Kalanick thinks of taxi regulations.

This is one of the reasons why the IT industry in the EU is so weak when compared to the US. As a citizen of an EU state I can't help but feel that we are here governed by complete morons.

jstalin 11y ago

More regulation begets more regulation. You can't expect bureaucrats who have been given authority over something to sit back and decide when they're done regulating.

wpietri 11y ago
I wouldn't totally blame the bureaucrats here, either. They're sort of like sysadmins: people only pay attention to them when something bad is happening, and that attention is rarely positive. Whereas when things are going well, nobody says, "Thank goodness for the bureaucrats that keep things running smoothly." Their incentives are mostly toward over-regulating. If they over-regulate, they mainly harm invisible potential improvements. Whereas if they under-regulate, the big, obvious failures mean they get in a lot of hot water.
- tobltobs 11y ago
  VAT MOSS did not only harm invisible potential improvements. It makes thousands of small business economically unviable. Same will be true for the new Oettinger law.
  - charlesdm 11y ago
    To be honest, VAT MOSS was introduced because large (American) companies were gaming the system by routing sales through Luxembourg to avoid significant amounts of VAT. It is nothing more than a counter tax avoidance measure.
    - tobltobs 11y ago
      That does not make this stupid law any better. They could have forced Luxembourg to adapt there laws to a more common standard. They could have made an exemption for small amounts.
      - charlesdm 11y ago
        The EU generally doesn't involve itself in the running of individual member states. They create directives that need to be translated to local law, but member states are free to do so as they wish within a certain framework. As far as I know, they don't force minimum tax rates - that's a freedom of a member state. That's also why you pay 33% corporate tax in Belgium and 5% in Malta.
        drx 11y ago
        The EU has set the minimum standard VAT rate as 15%.
    - Silhouette 11y ago
      It is nothing more than a counter tax avoidance measure. Unfortunately, it is something more than a counter tax avoidance measure, because it has caused vast collateral damage. It's a huge administrative burden that literally makes many micro-businesses unviable, and it imposes prohibitive overheads on slightly larger businesses that are just getting going. To add insult to injury, it's also impossible in practice to comply with the rules fully even if you make a good faith effort, unless you have a specialist VAT accountant's level understanding of each EU member state's tax system. Obviously no business except for large multinationals actually has this level of understanding available to it. What is particularly appalling in this case is that the authorities who spent all that time working on the new rules didn't even realise all those smaller businesses existed until the very end. A huge campaign against the new measures was started with just weeks to go. Most of the authorities across all levels of government pointed to years of discussions, said they consulted earlier, and asked why the small businesses didn't say anything before. It didn't even occur to them that the microbusinesses didn't know, because no-one had thought to contact them, unlike larger businesses with well-established VAT management, and because someone running a £500/year side business from their kitchen table to fund their kids' christmas presents might not be following the intricate details of EU tax negotiations. The icing on the cake is the often dysfunctional systems put in place to administer the new systems, which have made it very clear that even the national tax authorities often don't know what they're doing. Case in point: Multiple national tax authorities have already sent waves of wildly incorrect and extremely hostile demands for payment of supposedly unpaid VAT to small businesses in other countries. Imagine how you'd feel if you spent a year building up a side business, then one morning you woke up to a demand for over a million Euros, far more money than you'd ever made in your year of trading, saying if you didn't pay faster than you could sensibly get legal or tax advice then you'd be taken to court without further notice, inevitably killing your business. This is the reality when the EU gets to play with legal and tax rules but the people making the rules fail to understand the basic nature of how those rules will affect smaller businesses or individual citizens who aren't over there playing the games with the politicians. It's a scary prospect, and the way forward some of the EU bureaucrats see for the Internet and for intellectual property as we're discussing today seems many times worse than the short-sightedness they showed with the VAT mess a year ago.
  - undefined0 11y ago
    I had to stop working on a website which was soon to launch when I learned about VAT MOSS. Although, I was thinking whether a faucet-style (india/russia/romania workers) website could pay people $N per email to send the digital good/service manually. Then that should bypass the VAT MOSS legislation, right? Although, they do have plans to apply VAT MOSS to physical goods/services in 2016. It's a pain in the ass.

cLeEOGPw 11y ago

How are EU regulations holding EU IT industry back?

pvdebbe 11y ago
Regulations by definition are for holding rapidly advancing industries back, for various reasons.
- AnthonyMouse 11y ago
  Good regulations have almost nothing to do with technological change. We have regulations against pollution or fraud not because the technology has changed but because the incentives otherwise don't line up. You can pollute the air using technology from 1895 and if it's cheaper to do that than to install emissions controls then economics will drive you to do that unless regulations prohibit it. Regulating very new technologies is almost always unwise. There will already be existing generic laws and regulations against serious bad outcomes (you are not allowed to knowingly kill people regardless of method) and for less serious outcomes it's generally better to let the technology shake out and take some time to study and understand it, even if there is a short-term cost to doing that.
  - pvdebbe 11y ago
    Well I'm thinking along the lines, "low-polluting equipment is most likely more expensive => the company is held slightly back by demanding new standards". Maybe some regulation is needed, some is not. And all of it is by definition against the company. But not necessarily against the society as a whole.
- tormeh 11y ago
  That's just plain wrong.
tobltobs 11y ago
E.g. you want to sell digital goods in the EU? Check VAT MOSS. You can't find a EU law which will be a show stopper for you? No problem, there will be a national law which kills your business idea.

tluyben2 11y ago

It might be one of the reasons but not one of the biggest imho. The risk avoiding nature we seem to have picked up, the shame in failure (bankruptcy in the EU is often a life altering disgrace) and the draw towards comfort, free time and family life over making a billion Euro company seem to be bigger drivers as I see it.

tobltobs 11y ago
Cookie law, VAT MOSS, Abmahnungen and now the Öttinger tax. Even if you don't care about the risk, you would be stupid to found a startup in a EU country.
- noir_lord 11y ago
  All bad things but also they brought in strong privacy protections, held national governments to account for privacy invasions, have broadly stronger environment and safety legislation that most other regions. The EU isn't all good or all bad it's just huge.
  - tobltobs 11y ago
    "strong privacy protections ..", what do you mean? The Cookie law? "held national governments to account for privacy invasions"? They are sending our data to the US (e.g. data for airline passengers). "have broadly stronger environment and safety legislation" Maybe on paper, the EU agencies did know for years that VW (and other EU car producer) did cheat.
    - noir_lord 11y ago
      http://www.independent.co.uk/life-style/gadgets-and-tech/news/eu-rules-uks-porn-filters-are-illegal-a6711756.html http://www.independent.co.uk/life-style/gadgets-and-tech/new... (ruled default filters where illegal) http://europa.eu/rapid/press-release_STATEMENT-15-5654_en.htm http://europa.eu/rapid/press-release_STATEMENT-15-5654_en.ht... (ECJ overruled blanket Data Retention). http://www.wsj.com/articles/eu-court-strikes-down-trans-atlantic-safe-harbor-data-transfer-pact-1444121361 http://www.wsj.com/articles/eu-court-strikes-down-trans-atla... (safe harbour struck down). Specific instances show there are problems but all large scale human systems are messy. Yeah the EU isn't perfect but nothing is, I'd sooner my country (the UK) was in it than not though.

fsloth 11y ago

All governments protect incumbent players with large enough vested interests - if they yell loud enough. I think you view US through rose tinted glasses - go ask Elon Musk what he thinks of the laws protecting car dealerships there.

deleted 11y ago
[deleted]
quanticle 11y ago
Or what Travis Kalanick thinks of taxi regulations.