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I think this is nonsense - it’s only true if you believe the businesses should have existed without protecting user privacy. GDPR and such don’t require you to

by spydum 8y ago

I think this is nonsense - it’s only true if you believe the businesses should have existed without protecting user privacy. GDPR and such don’t require you to go out and buy any hardware, or pass through any other expensive compliance audits. PCI/DSS didn’t kill e-commerce, it just set a minimum bar for what companies SHOULD have already been doing.

betterunix2 8y ago
Any company effected by GDPR is at risk of being fined a (relatively) large sum. Even if the compliance cost of GDPR appears low, the regulatory risk is large enough that companies have to bear the cost of legal staff to deal with that possibility. Big companies are in a much better position to pay for such things than small companies. Moreover, startups seeking capital must convince potential investors that the chance of being wiped out by a GDPR complaint is low -- on top of convincing those investors that their business model is viable, that they are entering the market at the right time, etc. Plenty of startups with great ideas never get off the ground because they cannot get the initial capital they need, or they fail to get enough capital to survive a rare negative event. There is not much doubt that regulations raise the cost of entry to a market. The real question is whether or not it is worth it for society -- if we are willing to sacrifice a few small companies for the sake of the regulatory goal. User privacy is a fine goal, but the EU is losing the leadership it once had in the tech industry to the US and China. Where is the European answer to Google, Facebook, Tencent, or Alibaba? Where is the Europe in the AI race? It is not just GDPR; the right to be forgotten, the draconian copyright rules, and so forth have all contributed to a stifling regulatory environment in Europe and a stagnant tech industry.
tomhoward 8y ago
You dismissed my comment as “nonsense” but then didn’t refute anything I said. You implied it doesn’t matter if Google has less competition, and conveyed an unexamined assumption that the GDPR is the most reasonable and optimal way of assuring user privacy.
- Apocryphon 8y ago
  Is the cost of compliance truly prohibitive to new entrants? Because if it isn’t, then the claim truly is nonsense.
  - tomhoward 8y ago
    You've just re-asked the very question my parent commenter should have addressed if they were going to dismiss my first comment, avoided addressing it yourself, then repeated the "nonsense" dismissal with the addition of an emphatic word. People who are committed to logical argumentation – and I've seen this point made often on HN – will say that the reduction in the quantity and formidability of new startups is an acceptable price to pay for improved user privacy. It still leaves open the question of whether the GDPR is a reasonable and optimal way of achieving improved user privacy, but at least it's a logical argument. The question of whether GDPR really is reducing startup formation and success is unclear at this stage, and it's possible it will never really be known. This Bloomberg article [1] from November cites research suggesting that it is, but argues that it's probably not a bad thing. As I said, that's a fair enough position, but we all need to be clear clear about what our position is. [1] https://www.bloomberg.com/opinion/articles/2018-11-14/facebook-and-google-aren-t-hurt-by-gdpr-but-smaller-firms-are https://www.bloomberg.com/opinion/articles/2018-11-14/facebo...
    - Apocryphon 8y ago
      The study is examining the amount of venture funding received in countries affected by GDPR, which seems unrelated to your statement “startups that never get off the ground because the cost of compliance is prohibitive”. Investors backing off because of perceived costs of compliance do not necessarily mean compliance is all that much expensive. Furthermore, it would appear that the study is incomplete. > Wagman and Zhe Jin didn’t break down their data by business model, but if companies in the data extraction business receive less funding, Europe as whole and European consumers in particular probably won’t be any worse off. > There’s also the question of data quality; Jia, Wagman and Zhe Jin cautioned in their paper that their dataset was not complete. And indeed, according to Pitchbook, a multinational firm that tracks public and private equity investment, while venture activity in Europe dropped somewhat in the third quarter and is likely to be relatively flat for the year as a whole, the share of capital received by software companies is higher than ever before, which would suggest tech innovation isn’t exactly being stifled. It would seem that we are an impasse until further empirical data is collected. Perhaps an American experiment is in order?

by spydum 8y ago

betterunix2 8y ago

Any company effected by GDPR is at risk of being fined a (relatively) large sum. Even if the compliance cost of GDPR appears low, the regulatory risk is large enough that companies have to bear the cost of legal staff to deal with that possibility. Big companies are in a much better position to pay for such things than small companies. Moreover, startups seeking capital must convince potential investors that the chance of being wiped out by a GDPR complaint is low -- on top of convincing those investors that their business model is viable, that they are entering the market at the right time, etc. Plenty of startups with great ideas never get off the ground because they cannot get the initial capital they need, or they fail to get enough capital to survive a rare negative event. There is not much doubt that regulations raise the cost of entry to a market. The real question is whether or not it is worth it for society -- if we are willing to sacrifice a few small companies for the sake of the regulatory goal. User privacy is a fine goal, but the EU is losing the leadership it once had in the tech industry to the US and China. Where is the European answer to Google, Facebook, Tencent, or Alibaba? Where is the Europe in the AI race? It is not just GDPR; the right to be forgotten, the draconian copyright rules, and so forth have all contributed to a stifling regulatory environment in Europe and a stagnant tech industry.

tomhoward 8y ago

You dismissed my comment as “nonsense” but then didn’t refute anything I said. You implied it doesn’t matter if Google has less competition, and conveyed an unexamined assumption that the GDPR is the most reasonable and optimal way of assuring user privacy.

Apocryphon 8y ago
Is the cost of compliance truly prohibitive to new entrants? Because if it isn’t, then the claim truly is nonsense.
- tomhoward 8y ago
  You've just re-asked the very question my parent commenter should have addressed if they were going to dismiss my first comment, avoided addressing it yourself, then repeated the "nonsense" dismissal with the addition of an emphatic word. People who are committed to logical argumentation – and I've seen this point made often on HN – will say that the reduction in the quantity and formidability of new startups is an acceptable price to pay for improved user privacy. It still leaves open the question of whether the GDPR is a reasonable and optimal way of achieving improved user privacy, but at least it's a logical argument. The question of whether GDPR really is reducing startup formation and success is unclear at this stage, and it's possible it will never really be known. This Bloomberg article [1] from November cites research suggesting that it is, but argues that it's probably not a bad thing. As I said, that's a fair enough position, but we all need to be clear clear about what our position is. [1] https://www.bloomberg.com/opinion/articles/2018-11-14/facebook-and-google-aren-t-hurt-by-gdpr-but-smaller-firms-are https://www.bloomberg.com/opinion/articles/2018-11-14/facebo...
  - Apocryphon 8y ago
    The study is examining the amount of venture funding received in countries affected by GDPR, which seems unrelated to your statement “startups that never get off the ground because the cost of compliance is prohibitive”. Investors backing off because of perceived costs of compliance do not necessarily mean compliance is all that much expensive. Furthermore, it would appear that the study is incomplete. > Wagman and Zhe Jin didn’t break down their data by business model, but if companies in the data extraction business receive less funding, Europe as whole and European consumers in particular probably won’t be any worse off. > There’s also the question of data quality; Jia, Wagman and Zhe Jin cautioned in their paper that their dataset was not complete. And indeed, according to Pitchbook, a multinational firm that tracks public and private equity investment, while venture activity in Europe dropped somewhat in the third quarter and is likely to be relatively flat for the year as a whole, the share of capital received by software companies is higher than ever before, which would suggest tech innovation isn’t exactly being stifled. It would seem that we are an impasse until further empirical data is collected. Perhaps an American experiment is in order?