9 ms·

I've never understood what would happen if Google or Facebook just ignored EU regulations, claimed that they were not under the EU's jurisdiction, and ignored a

I've never understood what would happen if Google or Facebook just ignored EU regulations, claimed that they were not under the EU's jurisdiction, and ignored any judgement. Would the EU erect a great firewall at that point?

keldaris 9y ago
Couldn't they just take the money owed the usual way, by freezing accounts, confiscating assets, etc.? None of these corporations can feasibly avoid that without exiting EU markets altogether.
- tajen 9y ago
  Plus, as long as both EU and US are part of WTO, they are required to enforce each other's laws. Otherwise Europe could legitimately raise tariffs for the whole IT sector...
- bradleyjg 9y ago
  > None of these corporations can feasibly avoid that without exiting EU markets altogether. Ultimately if the fines or compliance costs get too high that's exactly what happens. A company that does no business in the EU is not subject to EU rules. But because it is such a large and wealthy market the threshold is very high. If Kazakstan passed a similar law it'd be a very different story.
tombrossman 9y ago
Google has assets within the EU which means ignoring EU laws is not an option, unless Google are prepared to forfeit those assets. It's not really a decision they have the authority to make anyhow. Imagine the shareholder lawsuits!
- kobeya 9y ago
  Shareholders filing lawsuits because the company refused to give away money to a fine?
  - shock 9y ago
    I'm assuming shareholders filing lawsuits because Google wouldn't be doing business in EU anymore.
  - somenewacc 9y ago
    Shareholders filing lawsuits because the company refused to follow the EU law
    - kobeya 9y ago
      Which would harm them... how?
      - rbjorklin 9y ago
        They will probably lose a billion customers?
        kobeya 9y ago
        THAT is the harm. That's my point. You can't sue someone for something that abstractly maybe implies something else. You sue for damages and have to show damages.
        pimmen 9y ago
        If the CEO does something that drastic, the share holders can ansolutely sue him or her because the CEO doesn't have the authority. You reckon the owner of a bus company won't fire and sue a bus driver who does something stupid that could endanger many lives? The key point is; it's not the CEO's company. He works for a pay check, the share holders invest for long term profits. Big difference.
      - pimmen 9y ago
        They are the owners of a company that ignores EU law. Good luck for the board or the major shareholders doing business in the EU again when they allowed stuff like this on their watch. Plus, they need the cooperation of governments. Their patents are just pieces of paper without governments enforcing them, for example, and their data centers need special power solutions. Governments don't trust companies that ignore government regulation. And, even if they hope that the US government is more lax with their restrictions and will turn a blind eye, the US is very heavily dependent on the OECD working, and not helping the EU prosecute blatant criminals would be a big problem for American credibility. This is not even getting into the fact that the EU is a much larger market than the American market is, too. In practice, just pretending regulations doesn't exist (depending on the regulations in question, of course) can be stupidly expensive for the company in question. Share holders don't like stuff that's risky and expensive and would replace a CEO that mad.
- vesinisa 9y ago
  And, it would be very difficult to accept payments from EU citizens for their sold products and services.
Sir_Substance 9y ago
Probably the EU states would unceremoniously and without further warning walk into their EU datacenters and seize every piece of hardware they own, which is quite a lot. The following outages would impact their US customers, who would sue under US jurisdiction.
cm2187 9y ago
The US happily enforces its own legislation outside of its territory (particularly in the financial world). By almost every single metric, the EU is bigger than the US. You could argue the EU is merely following the US footsteps.
- ariwilson 9y ago
  Economically, EU will be substantially smaller than the US after the UK leaves.
  - mbroncano 9y ago
    That's far from accurate. The U.K. currently represents around 15% of the EU GDP, which was around 15% higher than that of the US on its own (that includes Norway and Switzerland which are not member but allow me to pencil them in) If by substantially smaller you mean 'pretty much the same size' then yes you're right.
    - ariwilson 9y ago
      I think that if you're penciling in Norway and Switzerland, Canada should be penciled in for the US. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP) https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP) is pretty clear: 2016 GDP (PPP) figures: US $18.6T, EU $19.7T (6% higher than US), UK $2.8T, EU - UK $16.9T (10% lower than US)
theptip 9y ago
Things like this: https://www.wsj.com/articles/facebook-executive-arrested-in-brazil-1456851506 https://www.wsj.com/articles/facebook-executive-arrested-in-... The advantage of having armies and police forces is that you can lock people up who don't adhere to your rules. Good luck having any employees in Europe if you decide to ignore their regulations!
- kenbaylor 9y ago
  And that includes ever visiting or transiting through those countries.
s17n 9y ago
All of these companies do business in the EU, have offices and employees in the EU, etc. They are clearly subject to EU jurisdiction. They could shut down all their European operations, but that would cost them a lot more than 4% of revenue.
- Silhouette 9y ago
  They could shut down all their European operations, but that would cost them a lot more than 4% of revenue. There's an interesting assumption in there, and I'm not entirely sure it's a correct one. Facebook and its subsidiaries play a large part in many people's everyday lives now, in particular forming the main way a lot of people stay in touch with their friends and family. It is not at all clear to me what would happen if Facebook decided to call the EU's bluff here and literally switched off its service to everyone in the EU for a day or two, replacing it with a single page explaining that until the law was changed they would not be able to provide their service to EU customers.
  - nl 9y ago
    We can see what happens in these circumstances based on when China blocked services. People stop using it as much. That seems particularly bad for Facebook, given the network effects it relies on.
    - Silhouette 9y ago
      Counterpoint: When the Internet went "dark" over SOPA, people noticed, and SOPA died. If everyone in Europe woke up one morning next year to find Facebook saying that as a result of new EU law they had been required to turn off their service and please would everyone write to their representatives (using the form conveniently provided below) to ask why they'd done this, what do you think would happen?
      - FridgeSeal 9y ago
        For a lot of people, if not nearly all of them, it's a lot less effort to migrate to a new social network with your friends than it is to lobby to have some laws repealed, especially when it's clear that these laws are in the interest of the public and have been put together with serious thought and consultation.
exmicrosoldier 9y ago
The EU has a nuclear option for google. Ireland and the netherlands are both in the EU. If google loses its incorporation in those companies, it might have to pay US taxes on repatriated US holdings. Ireland and the Netherlands subcompanies are essential part of US Corporate tax evasion. (Double Irish with a Dutch sandwich).
- fulafel 9y ago
  The EU doesn't have the power to do that. The EU is more like a bunch of international treaties between sovereign states than an apex of power hierarchy.
  - sprafa 9y ago
    Used to be true but increasingly less since the euro crisis tbh. I've lived in two countries in the EU (native to one of them) and the perception is definitly that a lot of power has shifted, and not for the worst. Honestly small EU countries love the EU for the strong currency and the appearance that they have for making smart legislation like this one, the ban on roaming charges, etc. even the windows without IE thing was a good idea, while poorly implemented. Without the EU small countries would have little to no power over global corp anyway, so this is essentially the EU delivering on its promise.
Veratyr 9y ago
The EU can exert as much force as it likes on any assets within the EU and as exmicrosoldier pointed out (https://news.ycombinator.com/item?id=15137258 https://news.ycombinator.com/item?id=15137258), Google and Facebook have many of their assets outside the US to avoid the taxes incurred by repatriation. A very real possibility is that Google/Facebook will have these choices: - Comply with GDPR. - Shut down business in Europe entirely and eventually be forced to repatriate offshore assets and incur the relevant taxes. - Continue business in Europe, ignore the GDPR and pay a fine of 4% worldwide revenue. - Continue business in Europe, ignore the GDPR, don't pay the fine, have all European assets frozen. That's ignoring the possibility that the EU may be able to reach their US assets as well.
bluelu 9y ago
Google's and facebook's european customers must be compliant too. In case google or facebook don't comply, then they will be liable too. Whenever you sell to an european company, you must be compliant, as otherwise the european company is liable

keldaris 9y ago

Couldn't they just take the money owed the usual way, by freezing accounts, confiscating assets, etc.? None of these corporations can feasibly avoid that without exiting EU markets altogether.

tajen 9y ago
Plus, as long as both EU and US are part of WTO, they are required to enforce each other's laws. Otherwise Europe could legitimately raise tariffs for the whole IT sector...
bradleyjg 9y ago
> None of these corporations can feasibly avoid that without exiting EU markets altogether. Ultimately if the fines or compliance costs get too high that's exactly what happens. A company that does no business in the EU is not subject to EU rules. But because it is such a large and wealthy market the threshold is very high. If Kazakstan passed a similar law it'd be a very different story.

tombrossman 9y ago

Google has assets within the EU which means ignoring EU laws is not an option, unless Google are prepared to forfeit those assets. It's not really a decision they have the authority to make anyhow. Imagine the shareholder lawsuits!

kobeya 9y ago
Shareholders filing lawsuits because the company refused to give away money to a fine?
- shock 9y ago
  I'm assuming shareholders filing lawsuits because Google wouldn't be doing business in EU anymore.
- somenewacc 9y ago
  Shareholders filing lawsuits because the company refused to follow the EU law
  - kobeya 9y ago
    Which would harm them... how?
    - rbjorklin 9y ago
      They will probably lose a billion customers?
      - kobeya 9y ago
        THAT is the harm. That's my point. You can't sue someone for something that abstractly maybe implies something else. You sue for damages and have to show damages.
        pimmen 9y ago
        If the CEO does something that drastic, the share holders can ansolutely sue him or her because the CEO doesn't have the authority. You reckon the owner of a bus company won't fire and sue a bus driver who does something stupid that could endanger many lives? The key point is; it's not the CEO's company. He works for a pay check, the share holders invest for long term profits. Big difference.
    - pimmen 9y ago
      They are the owners of a company that ignores EU law. Good luck for the board or the major shareholders doing business in the EU again when they allowed stuff like this on their watch. Plus, they need the cooperation of governments. Their patents are just pieces of paper without governments enforcing them, for example, and their data centers need special power solutions. Governments don't trust companies that ignore government regulation. And, even if they hope that the US government is more lax with their restrictions and will turn a blind eye, the US is very heavily dependent on the OECD working, and not helping the EU prosecute blatant criminals would be a big problem for American credibility. This is not even getting into the fact that the EU is a much larger market than the American market is, too. In practice, just pretending regulations doesn't exist (depending on the regulations in question, of course) can be stupidly expensive for the company in question. Share holders don't like stuff that's risky and expensive and would replace a CEO that mad.
vesinisa 9y ago
And, it would be very difficult to accept payments from EU citizens for their sold products and services.

Sir_Substance 9y ago

Probably the EU states would unceremoniously and without further warning walk into their EU datacenters and seize every piece of hardware they own, which is quite a lot. The following outages would impact their US customers, who would sue under US jurisdiction.

cm2187 9y ago

The US happily enforces its own legislation outside of its territory (particularly in the financial world). By almost every single metric, the EU is bigger than the US. You could argue the EU is merely following the US footsteps.

ariwilson 9y ago
Economically, EU will be substantially smaller than the US after the UK leaves.
- mbroncano 9y ago
  That's far from accurate. The U.K. currently represents around 15% of the EU GDP, which was around 15% higher than that of the US on its own (that includes Norway and Switzerland which are not member but allow me to pencil them in) If by substantially smaller you mean 'pretty much the same size' then yes you're right.
  - ariwilson 9y ago
    I think that if you're penciling in Norway and Switzerland, Canada should be penciled in for the US. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP) https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP) is pretty clear: 2016 GDP (PPP) figures: US $18.6T, EU $19.7T (6% higher than US), UK $2.8T, EU - UK $16.9T (10% lower than US)

theptip 9y ago

Things like this: https://www.wsj.com/articles/facebook-executive-arrested-in-brazil-1456851506 https://www.wsj.com/articles/facebook-executive-arrested-in-... The advantage of having armies and police forces is that you can lock people up who don't adhere to your rules. Good luck having any employees in Europe if you decide to ignore their regulations!

kenbaylor 9y ago
And that includes ever visiting or transiting through those countries.

s17n 9y ago

All of these companies do business in the EU, have offices and employees in the EU, etc. They are clearly subject to EU jurisdiction. They could shut down all their European operations, but that would cost them a lot more than 4% of revenue.

Silhouette 9y ago
They could shut down all their European operations, but that would cost them a lot more than 4% of revenue. There's an interesting assumption in there, and I'm not entirely sure it's a correct one. Facebook and its subsidiaries play a large part in many people's everyday lives now, in particular forming the main way a lot of people stay in touch with their friends and family. It is not at all clear to me what would happen if Facebook decided to call the EU's bluff here and literally switched off its service to everyone in the EU for a day or two, replacing it with a single page explaining that until the law was changed they would not be able to provide their service to EU customers.
- nl 9y ago
  We can see what happens in these circumstances based on when China blocked services. People stop using it as much. That seems particularly bad for Facebook, given the network effects it relies on.
  - Silhouette 9y ago
    Counterpoint: When the Internet went "dark" over SOPA, people noticed, and SOPA died. If everyone in Europe woke up one morning next year to find Facebook saying that as a result of new EU law they had been required to turn off their service and please would everyone write to their representatives (using the form conveniently provided below) to ask why they'd done this, what do you think would happen?
    - FridgeSeal 9y ago
      For a lot of people, if not nearly all of them, it's a lot less effort to migrate to a new social network with your friends than it is to lobby to have some laws repealed, especially when it's clear that these laws are in the interest of the public and have been put together with serious thought and consultation.

exmicrosoldier 9y ago

The EU has a nuclear option for google. Ireland and the netherlands are both in the EU. If google loses its incorporation in those companies, it might have to pay US taxes on repatriated US holdings. Ireland and the Netherlands subcompanies are essential part of US Corporate tax evasion. (Double Irish with a Dutch sandwich).

fulafel 9y ago
The EU doesn't have the power to do that. The EU is more like a bunch of international treaties between sovereign states than an apex of power hierarchy.
- sprafa 9y ago
  Used to be true but increasingly less since the euro crisis tbh. I've lived in two countries in the EU (native to one of them) and the perception is definitly that a lot of power has shifted, and not for the worst. Honestly small EU countries love the EU for the strong currency and the appearance that they have for making smart legislation like this one, the ban on roaming charges, etc. even the windows without IE thing was a good idea, while poorly implemented. Without the EU small countries would have little to no power over global corp anyway, so this is essentially the EU delivering on its promise.

Veratyr 9y ago

The EU can exert as much force as it likes on any assets within the EU and as exmicrosoldier pointed out (https://news.ycombinator.com/item?id=15137258 https://news.ycombinator.com/item?id=15137258), Google and Facebook have many of their assets outside the US to avoid the taxes incurred by repatriation. A very real possibility is that Google/Facebook will have these choices: - Comply with GDPR. - Shut down business in Europe entirely and eventually be forced to repatriate offshore assets and incur the relevant taxes. - Continue business in Europe, ignore the GDPR and pay a fine of 4% worldwide revenue. - Continue business in Europe, ignore the GDPR, don't pay the fine, have all European assets frozen. That's ignoring the possibility that the EU may be able to reach their US assets as well.

bluelu 9y ago

Google's and facebook's european customers must be compliant too. In case google or facebook don't comply, then they will be liable too. Whenever you sell to an european company, you must be compliant, as otherwise the european company is liable