7 ms·

Can Google just close shop in the EU and ignore the fine? Nothing they provide really mandates they have a physical presence.

mraison 8y ago
GDPR?
chrisper 8y ago
And fire all Google employees in Europe?
close04 8y ago
It's cutting your nose to spite your face. This isn't how business is done. So they would give up tens of billions in revenue per year for a one time comparatively low fine. If Google packs its bags they'll be the ones feeling most of the pain. And such a drastic move would have consequences on any business Alphabet tries to do in the EU over the next decades.
- thrillgore 8y ago
  After GDPR? I'm seeing the EU as a sizable liability that hands out fines like candy. Blocking them doesn't seem like a crazy idea.
  - detaro 8y ago
    On what data do you base your judgement that GDPR means the EU "hands out fines like candy"?
    - close04 8y ago
      If anything they're not handing out enough fines. Companies just pay them and keep doing shady business because it's financially more sound to keep abusing the system. Paying the fine is cheaper than correcting their business practices.
    - frockington 8y ago
      The article this post links to would point to the trigger happy fine nature of the EU when it comes to American technology
      - SparklingCotton 8y ago
        Amazing how your single data point lead you to that conclusion..
      - detaro 8y ago
        A years-long investigation into a mega-corp is "trigger-happy" and cause for worry?
        frockington 8y ago
        The amount of the fine is. Seems petty at best, vindictive at worst
        Daishiman 8y ago
        I'm sorry in what planet do you get to not be heavily punished after openly ignoring the law for two years?
        close04 8y ago
        The amount of the fine is literally proportional to the revenue that was made using the practices in question. The more money you make by breaking the rules, the bigger the fine. Which part is petty or vindictive?
      - close04 8y ago
        On the bright side many decisions the EU takes also benefit the rest of the world by virtue of being a big enough market. Of course you can expect any government to be a little easier on local businesses but as far as correctness goes the EU has always done a pretty good job.
skrause 8y ago
> Can Google just close shop in the EU and ignore the fine? Sure, if they don't want to get any revenue from the whole European Union anymore. Fortunately the EU is a big enough market so that Google doesn't have any leverage here.
- garmaine 8y ago
  Other commentators are saying the fine is between 1/3 to a half of google’s profits. I sincerely doubt the EU represents more than that share of google’s revenues. But of course I doubt they would pull out as this is a one time thing.
  - nl 8y ago
    You are comparing a proportion of one year of Google's profit and all EU revenue for all time.
    - frockington 8y ago
      Couldn't they still generate revenue from ads and services in Europe? The EU could block Android phones but its not like they are going to build a firewall.
      - nl 8y ago
        They can block all financial transactions so no EU business can use them.
  - Radle 8y ago
    Google's profits are a bit weird right now, thanks to the new us tax law. (I wrote more about that at the end) Their 2016 profit was $19.4 billion and without the one-time foreign asset charge it would have been $22,4 billion, as such the fine compromises less than 1/4 of googles earnings. Their European revenue was $22.6 billion out of $90 billion total revenue for 2016. This makes it look like an incredible high fine. It's important to notice that the revenue in Europe is mostly google ads. The total revenue for alphabet is also bloated by thing stuff like other bet, which produce $400 million revenue and $900 million loss. Or to put it more bluntly, the revenue in Europe has a stronger influence on alphabets profits than the revenue in the USA. I still think the fine is incredible high, one reason for this might be a lack of commitment from google after they were fined for $2.4 billion last year. This being the second time google breaks European anti trust laws. In a really short time. Last year they were fined for what Brusels describe like this in their press released: Since the beginning of each abuse, Google's comparison shopping service has increased its traffic 45-fold in the United Kingdom, 35-fold in Germany, 19-fold in France, 29-fold in the Netherlands, 17-fold in Spain and 14-fold in Italy. ---- A bit more on why google earnings are weird: "For the quarter of 2017 that ended on December 31, 2017, it actually recorded a loss of $3 billion, but that was due to a one-time foreign assets charge due to the recently passed U.S. Tax Cuts and Jobs Act. If that is excluded, Alphabet would have had net income of $6.8 billion, up from $5.3 billion compared to a year ago. " yearly "For the entire 2017 fiscal year, Alphabet recorded revenues of $110.8 billion, up from $90 billion in 2016. Net income was $12.6 billion for the 2017 fiscal year, compared to $19.4 billion in revenues in 2016, once again reflecting the one time charge due to the tax law change." src: https://www.androidauthority.com/alphabet-q4-2017-earnings-834774/ https://www.androidauthority.com/alphabet-q4-2017-earnings-8... https://www.theguardian.com/business/2016/nov/04/google-pays-47m-euros-tax-ireland-22bn-euros-revenue https://www.theguardian.com/business/2016/nov/04/google-pays... http://europa.eu/rapid/press-release_IP-17-1784_en.htm http://europa.eu/rapid/press-release_IP-17-1784_en.htm
kuschku 8y ago
Sure, but Google will even with the fine have made a significant profit in the EU. Google leaving the EU would be, for the company, like Google leaving the US – firing half their staff, losing half their revenue and profits, etc. Absolutely not worth it.
icebraining 8y ago
The EU could just seize their assets - like the money paid by EU companies advertising on Google's properties.
Cthulhu_ 8y ago
Well no, they need the EU to evade taxes in their home country.
rusk 8y ago
They could but they'd lose access to the economy with the largest spending power per capita in the world. Inevitably another player would spring up to feed this void and could then use that as a platform to start eating their lunch elsewhere.
- oblio 8y ago
  Per capita the US spends more. But the EU still spends a lot and has more citizens.
- repolfx 8y ago
  They probably wouldn't. Do you imagine the EU would force every ISP to block Google web search, Gmail, etc? Beyond being technically difficult I do not believe the EU currently has the power to create a Great Firewall of Europe like that.
  - rusk 8y ago
    Yeah the discussion here is about smartphones ... They "could" block all import of Android based smart phones if they wished (based on noncompliance with trade rules of course). In all liklihood they'd slap a levy on these imports which would either raise their price making alternatives more interesting to the market. Android devices are dominant in the cost sensitive segment. Alternatively the manufacturers could push this back on to google or it might provide additional commercial impetus to develop a viable alternative. That's the beauty of one of the largest economies in the world singing in harmony from the same hymn-sheet. When the collective foot is stamped it echoes around the world.
    - repolfx 8y ago
      The discussion was about "losing access". To do that the EU would have to impose not just tariffs but complete import bans on dozens or maybe hundreds of OEMs, many of which aren't American. It'd mean starting a phone-oriented trade war with most of the world's big economies, and handing the entire European market to Apple. But Android is much more popular than Apple phones in some EU countries (not all) mostly because it's a lot cheaper. So either a lot of Europeans would have to fork out a lot more than they wanted to for a phone, or decide they couldn't afford a smartphone at all and go back to feature phones. This is why you admit the EU would never do this. When the collective foot is stamped it echoes around the world. Very Orwellian imagery you have there. It wouldn't really echo around the world. Google wouldn't give a crap. Android was created mostly to stop Apple from gaining a monopoly and holding them over a barrel with respect to services (go read up on the origins of the project). It has wildly succeeded in that mission already. If the EU selectively taxes its own people whenever they buy an Android smartphone, this would not only hurt the EU's own popularity significantly (people love their cheap smartphones), but it wouldn't harm Google much or at all because Apple un-clenched a lot since Jobs died and iOS is a more open platform than it used to be, albeit, still nowhere near as open as Android. The rest of the world is sufficient to keep Apple in check anyway.
matlock 8y ago
They have many employees and large revenues here. Its not as easy to say all revenue from now on goes to the US.
peteretep 8y ago
Losing out on a market place with 22% of the world GDP and ceding it to Amazon, Apple and Microsoft would probably invite at least a little bit of shareholder challenge.
mtgx 8y ago
I don't know. How many tens of billions a year is Google making from the EU?

mraison 8y ago

GDPR?

chrisper 8y ago

And fire all Google employees in Europe?

close04 8y ago

It's cutting your nose to spite your face. This isn't how business is done. So they would give up tens of billions in revenue per year for a one time comparatively low fine. If Google packs its bags they'll be the ones feeling most of the pain. And such a drastic move would have consequences on any business Alphabet tries to do in the EU over the next decades.

thrillgore 8y ago
After GDPR? I'm seeing the EU as a sizable liability that hands out fines like candy. Blocking them doesn't seem like a crazy idea.
- detaro 8y ago
  On what data do you base your judgement that GDPR means the EU "hands out fines like candy"?
  - close04 8y ago
    If anything they're not handing out enough fines. Companies just pay them and keep doing shady business because it's financially more sound to keep abusing the system. Paying the fine is cheaper than correcting their business practices.
  - frockington 8y ago
    The article this post links to would point to the trigger happy fine nature of the EU when it comes to American technology
    - SparklingCotton 8y ago
      Amazing how your single data point lead you to that conclusion..
    - detaro 8y ago
      A years-long investigation into a mega-corp is "trigger-happy" and cause for worry?
      - frockington 8y ago
        The amount of the fine is. Seems petty at best, vindictive at worst
        Daishiman 8y ago
        I'm sorry in what planet do you get to not be heavily punished after openly ignoring the law for two years?
        close04 8y ago
        The amount of the fine is literally proportional to the revenue that was made using the practices in question. The more money you make by breaking the rules, the bigger the fine. Which part is petty or vindictive?
    - close04 8y ago
      On the bright side many decisions the EU takes also benefit the rest of the world by virtue of being a big enough market. Of course you can expect any government to be a little easier on local businesses but as far as correctness goes the EU has always done a pretty good job.

skrause 8y ago

> Can Google just close shop in the EU and ignore the fine? Sure, if they don't want to get any revenue from the whole European Union anymore. Fortunately the EU is a big enough market so that Google doesn't have any leverage here.

garmaine 8y ago
Other commentators are saying the fine is between 1/3 to a half of google’s profits. I sincerely doubt the EU represents more than that share of google’s revenues. But of course I doubt they would pull out as this is a one time thing.
- nl 8y ago
  You are comparing a proportion of one year of Google's profit and all EU revenue for all time.
  - frockington 8y ago
    Couldn't they still generate revenue from ads and services in Europe? The EU could block Android phones but its not like they are going to build a firewall.
    - nl 8y ago
      They can block all financial transactions so no EU business can use them.
- Radle 8y ago
  Google's profits are a bit weird right now, thanks to the new us tax law. (I wrote more about that at the end) Their 2016 profit was $19.4 billion and without the one-time foreign asset charge it would have been $22,4 billion, as such the fine compromises less than 1/4 of googles earnings. Their European revenue was $22.6 billion out of $90 billion total revenue for 2016. This makes it look like an incredible high fine. It's important to notice that the revenue in Europe is mostly google ads. The total revenue for alphabet is also bloated by thing stuff like other bet, which produce $400 million revenue and $900 million loss. Or to put it more bluntly, the revenue in Europe has a stronger influence on alphabets profits than the revenue in the USA. I still think the fine is incredible high, one reason for this might be a lack of commitment from google after they were fined for $2.4 billion last year. This being the second time google breaks European anti trust laws. In a really short time. Last year they were fined for what Brusels describe like this in their press released: Since the beginning of each abuse, Google's comparison shopping service has increased its traffic 45-fold in the United Kingdom, 35-fold in Germany, 19-fold in France, 29-fold in the Netherlands, 17-fold in Spain and 14-fold in Italy. ---- A bit more on why google earnings are weird: "For the quarter of 2017 that ended on December 31, 2017, it actually recorded a loss of $3 billion, but that was due to a one-time foreign assets charge due to the recently passed U.S. Tax Cuts and Jobs Act. If that is excluded, Alphabet would have had net income of $6.8 billion, up from $5.3 billion compared to a year ago. " yearly "For the entire 2017 fiscal year, Alphabet recorded revenues of $110.8 billion, up from $90 billion in 2016. Net income was $12.6 billion for the 2017 fiscal year, compared to $19.4 billion in revenues in 2016, once again reflecting the one time charge due to the tax law change." src: https://www.androidauthority.com/alphabet-q4-2017-earnings-834774/ https://www.androidauthority.com/alphabet-q4-2017-earnings-8... https://www.theguardian.com/business/2016/nov/04/google-pays-47m-euros-tax-ireland-22bn-euros-revenue https://www.theguardian.com/business/2016/nov/04/google-pays... http://europa.eu/rapid/press-release_IP-17-1784_en.htm http://europa.eu/rapid/press-release_IP-17-1784_en.htm

kuschku 8y ago

Sure, but Google will even with the fine have made a significant profit in the EU. Google leaving the EU would be, for the company, like Google leaving the US – firing half their staff, losing half their revenue and profits, etc. Absolutely not worth it.

icebraining 8y ago

The EU could just seize their assets - like the money paid by EU companies advertising on Google's properties.

Cthulhu_ 8y ago

Well no, they need the EU to evade taxes in their home country.

rusk 8y ago

They could but they'd lose access to the economy with the largest spending power per capita in the world. Inevitably another player would spring up to feed this void and could then use that as a platform to start eating their lunch elsewhere.

oblio 8y ago
Per capita the US spends more. But the EU still spends a lot and has more citizens.
repolfx 8y ago
They probably wouldn't. Do you imagine the EU would force every ISP to block Google web search, Gmail, etc? Beyond being technically difficult I do not believe the EU currently has the power to create a Great Firewall of Europe like that.
- rusk 8y ago
  Yeah the discussion here is about smartphones ... They "could" block all import of Android based smart phones if they wished (based on noncompliance with trade rules of course). In all liklihood they'd slap a levy on these imports which would either raise their price making alternatives more interesting to the market. Android devices are dominant in the cost sensitive segment. Alternatively the manufacturers could push this back on to google or it might provide additional commercial impetus to develop a viable alternative. That's the beauty of one of the largest economies in the world singing in harmony from the same hymn-sheet. When the collective foot is stamped it echoes around the world.
  - repolfx 8y ago
    The discussion was about "losing access". To do that the EU would have to impose not just tariffs but complete import bans on dozens or maybe hundreds of OEMs, many of which aren't American. It'd mean starting a phone-oriented trade war with most of the world's big economies, and handing the entire European market to Apple. But Android is much more popular than Apple phones in some EU countries (not all) mostly because it's a lot cheaper. So either a lot of Europeans would have to fork out a lot more than they wanted to for a phone, or decide they couldn't afford a smartphone at all and go back to feature phones. This is why you admit the EU would never do this. When the collective foot is stamped it echoes around the world. Very Orwellian imagery you have there. It wouldn't really echo around the world. Google wouldn't give a crap. Android was created mostly to stop Apple from gaining a monopoly and holding them over a barrel with respect to services (go read up on the origins of the project). It has wildly succeeded in that mission already. If the EU selectively taxes its own people whenever they buy an Android smartphone, this would not only hurt the EU's own popularity significantly (people love their cheap smartphones), but it wouldn't harm Google much or at all because Apple un-clenched a lot since Jobs died and iOS is a more open platform than it used to be, albeit, still nowhere near as open as Android. The rest of the world is sufficient to keep Apple in check anyway.

matlock 8y ago

They have many employees and large revenues here. Its not as easy to say all revenue from now on goes to the US.

peteretep 8y ago

Losing out on a market place with 22% of the world GDP and ceding it to Amazon, Apple and Microsoft would probably invite at least a little bit of shareholder challenge.

mtgx 8y ago

I don't know. How many tens of billions a year is Google making from the EU?