6 ms·

I think Europe is dead set on legislating itself into digital irrelevancy. Instead of focusing on the obvious question (why is there not a single European compa

by sbacic 8y ago

I think Europe is dead set on legislating itself into digital irrelevancy. Instead of focusing on the obvious question (why is there not a single European company in the top 15 internet companies?) they're obsessed with finding ways to tax US internet giants as much as they can, in any way they can, without giving a damn about the collateral damage they are causing to their own small businesses in the process. What should _really_ concern the powers that be is that Europe has become a place to sell things, not make them.

Hamuko 8y ago
>I think Europe is dead set on legislating itself into digital irrelevancy. Just because the EU passed privacy regulations?
- ApolloFortyNine 8y ago
  I'm almost 100% sure he's referencing Articles 11 and 13.
- sbacic 8y ago
  No, that's (arguably - but I'd say yes) one of the rare good ideas. It's stuff like the VAT directive and the new Copyright directive that are the problems. The Copyright directive in particular - we Europeans often found some comfort in the fact that corporate lobbies don't have nearly as much power in the EU as they do in the US. Sadly, if that directive passes, we won't even have that.
mpweiher 8y ago
> ways to tax US internet giants as much as they can Er, no. Just to tax them at all. US companies have been completely dodging paying taxes in Europe (effective tax rates of <1% on billions of profits).
- sbacic 8y ago
  Keep in mind that US companies are selling things in Europe. They're not making them. The cost to create those things are borne somewhere else - so it definitely makes sense to shift profits - otherwise you'd end up in a situation where all those expenses aren't really tax exempt.
  - Hamuko 8y ago
    Apple designs its products in the United States, manufacturers them in China and them hides its money in Ireland to avoid paying taxes. Shouldn't they be paying those taxes in China or the US?
    - purple_ducks 8y ago
      > Shouldn't they be paying those taxes in China or the US? Well for one, Apple contracts out the manufacturing of the products to multiple Chinese companies so I fail to see what taxes on profits they would be paying in China wrt manufacturing. The EU(~508m ppl) is not the US. Apple have a massive presence in Ireland dealing with everything EU specific from before the products hits the shelves to after they're bought.
    - sbacic 8y ago
      They should, but I'm not sure how that changes things for Europe? It still wouldn't be getting any more tax money if Apple was paying more tax in the US rather than stashing it away in tax havens.
      - Hamuko 8y ago
        At least Apple would be paying its taxes somewhere.
CharlesColeman 8y ago
> I think Europe is dead set on legislating itself into digital irrelevancy. > What should _really_ concern the powers that be is that Europe has become a place to sell things, not make them. Has China legislated itself into digital irrelevancy? Is China just a place to sell things but not make them? It's internet policies are objectively bad in many ways, but they've proven that you don't need to cater to FAANG to have a thriving tech ecosystem.
- Hamuko 8y ago
  One reason is just that China is getting more creative when it comes to stealing foreign intellectual property.
kerng 8y ago
The tech giants seem to pay no taxes at all in Europe, due to some loopholes they exploit with Ireland. Closing those loopholes seems reasonable, so they can pay their fair taxes as any other business has to do.
Reedx 8y ago
> why is there not a single European company in the top 15 internet companies? I'm curious about that too. Anyone have a good answer as to why there isn't at least 1 by now?
- gaogao 8y ago
  The US is a good market to start in. Large, most people speak a common language (English), tons of people on the internet. Additionally, many of these internet companies are formed from the ashes and exiles of older companies in the US. Valve is founded by former Microsoft employees, Google got Jeff Dean and Sanjay from DEC, etc. Also, a bunch of money flows from investors who profited off early internet companies in the US, such as the Paypal mafia and Netscape. Investors who want their startups nearby.
- sbacic 8y ago
  Besides what gaogao mentioned, I'd like to mention one other thing - salaries. Just do a comparison between, say, London and San Francisco. And that's before we take into account high taxes most Europeans have to pay on their salaries.
  - Hamuko 8y ago
    Are you comparing salaries or purchasing power?
    - sbacic 8y ago
      There is not much difference between the two. Sure, healthcare is a lot cheaper than in the US, but most other things are a LOT more expensive in Europe.
      - Hamuko 8y ago
        Renting a one bedroom apartment in San Francisco costs $3560 per month. I paid around 800 euros per month for a one bedroom apartment when I moved into the capital region in my country. I've since moved and now I own my own apartment. About 900 euros a month for living expenses and it's 10 m^2 bigger. I also graduated without any debt, so that's not an expense I have to deal with. To me, it really seems like US is the expensive option unless I'm buying phones and computers.
__m 8y ago
Well its citizens are not for sale.
balabaster 8y ago
I can't speak for the entire European market, but software engineers in the UK are paid pittance compared to the U.S. - even for top shelf engineers with the education, a solid track record and glowing references. I've been keeping my eye on the UK market for years - the last 20 years to be exact in a bid to consider moving back home. I would have to consider an almost guaranteed 75% pay cut (incl. cost of living adjustment) to move. I have a British passport, I was born and grew up there until I was 25. I have a place to stay in London upon my arrival to help me get set up. I am legally allowed to take any job that would hire me. I still cannot justify the move. It's too much to ask of anyone. The reason the UK is not the tech giant the U.S. is, is that they don't take developers seriously. Until they stem the tide of developers leaving the UK for a decent income and cost of living, they're never ever going to have what the U.S. has. They don't need to legislate themselves into digital irrelevance, they're already digitally irrelevant, they just need to keep paying developers what they're paying them now.
- pjc50 8y ago
  Conversely, why are US tech companies not outsourcing more to drive up salaries?
  - balabaster 8y ago
    Two reasons: 1. The top companies have finally managed to learn that outsourcing of your product to overseas companies drives the quality of the product into the ground. When you separate your project stakeholders and subject matter experts from your UX and development teams, shit falls to pieces in a hurry. 2. U.S. Tech companies don't give a shit about driving up global salaries, they give a shit about their own success and profits - right now. They already have a team fueling their success and they'd like to keep them close.
    - oarabbus_ 8y ago
      Outsourcing to low-quality shops in India drives the quality of the product into the ground. Outsouring to high-quality Indian firms, or to British/Euro firms, doesn't.
mnm1 8y ago
Perhaps Europe doesn't want giant corporations that pay no tax, create a few thousand decent jobs at most, and are in all other ways detrimental to society and all the other workers they employ. It seems to me like the laws are generally created to avoid this kind of predatory, vampiric corporation that Americans love so much in favor of corporations that work for workers rather than corporations that work only for their owners. But who knows? Certainly the lack of giant tech corporations is a feature, not a bug. Who wants a company like Facebook or Amazon that brings very little to society, pays no taxes, and creates very few well paying jobs sucking up resources for its own profit only when they can have an actual competitive economy and marketplace? Perhaps European regulators want to avoid the monopoly and oligopoly that dominate American markets, especially American tech markets.
- sbacic 8y ago
  I'm very, very wary of any corporations that "work in the interest of the workers". What that usually translates into (at least here) is the government subsidizing said corporations with public money. Case in point, a pair of shipyards are making the news because they (yet again) need a bailout in order to continue to function. "Think of the workers", "local business" and such are being thrown around. I just hope that this time the EU won't let the government waste taxpayer money.
  - mnm1 8y ago
    That has nothing to do with it. I'm talking about providing decent wages, vacation, normal working hours, steady jobs, etc. Of course, these laws need to be implemented by the government but it has nothing to do with taking government funding.
    - sbacic 8y ago
      All of those things are required by law and apply to local companies and subsidiaries of US tech giants in equal measure, so I'm not quite sure what your point is. I, for one, would gladly exchange the current menagerie of dysfunctional local companies for FAANG subsidiaries. Microsoft pays some of the highest salaries here, doesn't need regular government bailouts and doesn't depend on rent-seeking to make its profit - which is more than I can say for many businesses here.
flexie 8y ago
Unless you are one of the founders or investors, there is little reason to rejoice in the current valuations of American tech companies. It has little to do with innovation and a lot to do with extremely lax regulation. What the world needs from tech is not just better AI or drones. The world needs tech to be regulated, and Europe, not the US, is currently providing more regulatory innovations: - how do we curb the emergence of giant tech corporations with finances the size of nation states that literally threatens democracies through lobbying and fake news? The US was there a hundred years ago with antitrust regulation but it seems like the US is not enforcing antitrust law anymore - how do we make those giant tech corporations pay fair share of tax? Again, the US used to tax it's corporations, but when it comes to tech, the US seems content with letting them hide their income in foreign tax shelters - how do we protect content creators like journalists from the giant tech corporations' completely free consumption of their work? - how do we regulate the so called "sharing economy" so that highly regulated industries such as hotels and taxis are not met with unfair competition by companies who's main innovation seems to be that they don't follow rules? - how do we secure the privacy of citizens?
- sbacic 8y ago
  I'm not rejoicing. I'm merely pointing out that, at least for me (and I dare say - most of Europeans that don't live in comfy western economies) is that most regulations are not all that important issues. They're more concerned over high taxes, poor public services, a mediocre economy and various societal issues (corruption, demographic collapse, lack of long-term economic planning...). As a person running a small business, I don't see these motions by the EU as "sticking up for the little guy" or looking out for local businesses. I see them as just more things to think about as I try to keep my business running and growing. Furthermore, I see a lot of talk about tax and fairness. I don't see a lot of talk about how that money is spent or what the benefits of running a European company are.
- jdc 8y ago
  "how do we curb the emergence of giant tech corporations with finances the size of nation states that literally threatens democracies [...]" I don't know, but this problem easily generalizes _all_ giant corporations.
deleted 8y ago
[deleted]
the_duke 8y ago
Privacy protections become more and more relevant with the ubiquity of information that companies process, store and share. Sure it adds work for companies, but that is a preferable trade off to the alternative. GDPR won't make the difference between a company being a large global player or not. Similarly, taxing companies that go to every possible extent to avoid it and hardly pay any taxes even though they are some of the largest companies in the world is hardly being "obsessed with finding ways to tax US internet giants as much as they can". I think a large reason for the lack of large European IT companies is the language and small/segmented markets problem. It's natural to start with your home country/market since that is were you are, were you have market insight, connections to get things going, .... But in Europe you have many countries with different languages, different currencies, tax schemes, regulations, and very different levels of income and prosperity. Expansion / internationalization is often a very cumbersome step by step process. Compared to the US where you have a large demographic with a single language, somewhat more unified regulation, and a big ecosystem of startups, things are a lot more challenging. Stricter employment protection and regulation in general, and the lack of the achievement and entrepreneurial culture certainly play a role though.

by sbacic 8y ago

Hamuko 8y ago

>I think Europe is dead set on legislating itself into digital irrelevancy. Just because the EU passed privacy regulations?

ApolloFortyNine 8y ago
I'm almost 100% sure he's referencing Articles 11 and 13.
sbacic 8y ago
No, that's (arguably - but I'd say yes) one of the rare good ideas. It's stuff like the VAT directive and the new Copyright directive that are the problems. The Copyright directive in particular - we Europeans often found some comfort in the fact that corporate lobbies don't have nearly as much power in the EU as they do in the US. Sadly, if that directive passes, we won't even have that.

mpweiher 8y ago

> ways to tax US internet giants as much as they can Er, no. Just to tax them at all. US companies have been completely dodging paying taxes in Europe (effective tax rates of <1% on billions of profits).

sbacic 8y ago
Keep in mind that US companies are selling things in Europe. They're not making them. The cost to create those things are borne somewhere else - so it definitely makes sense to shift profits - otherwise you'd end up in a situation where all those expenses aren't really tax exempt.
- Hamuko 8y ago
  Apple designs its products in the United States, manufacturers them in China and them hides its money in Ireland to avoid paying taxes. Shouldn't they be paying those taxes in China or the US?
  - purple_ducks 8y ago
    > Shouldn't they be paying those taxes in China or the US? Well for one, Apple contracts out the manufacturing of the products to multiple Chinese companies so I fail to see what taxes on profits they would be paying in China wrt manufacturing. The EU(~508m ppl) is not the US. Apple have a massive presence in Ireland dealing with everything EU specific from before the products hits the shelves to after they're bought.
  - sbacic 8y ago
    They should, but I'm not sure how that changes things for Europe? It still wouldn't be getting any more tax money if Apple was paying more tax in the US rather than stashing it away in tax havens.
    - Hamuko 8y ago
      At least Apple would be paying its taxes somewhere.

CharlesColeman 8y ago

> I think Europe is dead set on legislating itself into digital irrelevancy. > What should _really_ concern the powers that be is that Europe has become a place to sell things, not make them. Has China legislated itself into digital irrelevancy? Is China just a place to sell things but not make them? It's internet policies are objectively bad in many ways, but they've proven that you don't need to cater to FAANG to have a thriving tech ecosystem.

Hamuko 8y ago
One reason is just that China is getting more creative when it comes to stealing foreign intellectual property.

kerng 8y ago

The tech giants seem to pay no taxes at all in Europe, due to some loopholes they exploit with Ireland. Closing those loopholes seems reasonable, so they can pay their fair taxes as any other business has to do.

Reedx 8y ago

> why is there not a single European company in the top 15 internet companies? I'm curious about that too. Anyone have a good answer as to why there isn't at least 1 by now?

gaogao 8y ago
The US is a good market to start in. Large, most people speak a common language (English), tons of people on the internet. Additionally, many of these internet companies are formed from the ashes and exiles of older companies in the US. Valve is founded by former Microsoft employees, Google got Jeff Dean and Sanjay from DEC, etc. Also, a bunch of money flows from investors who profited off early internet companies in the US, such as the Paypal mafia and Netscape. Investors who want their startups nearby.
sbacic 8y ago
Besides what gaogao mentioned, I'd like to mention one other thing - salaries. Just do a comparison between, say, London and San Francisco. And that's before we take into account high taxes most Europeans have to pay on their salaries.
- Hamuko 8y ago
  Are you comparing salaries or purchasing power?
  - sbacic 8y ago
    There is not much difference between the two. Sure, healthcare is a lot cheaper than in the US, but most other things are a LOT more expensive in Europe.
    - Hamuko 8y ago
      Renting a one bedroom apartment in San Francisco costs $3560 per month. I paid around 800 euros per month for a one bedroom apartment when I moved into the capital region in my country. I've since moved and now I own my own apartment. About 900 euros a month for living expenses and it's 10 m^2 bigger. I also graduated without any debt, so that's not an expense I have to deal with. To me, it really seems like US is the expensive option unless I'm buying phones and computers.

__m 8y ago

Well its citizens are not for sale.

balabaster 8y ago

I can't speak for the entire European market, but software engineers in the UK are paid pittance compared to the U.S. - even for top shelf engineers with the education, a solid track record and glowing references. I've been keeping my eye on the UK market for years - the last 20 years to be exact in a bid to consider moving back home. I would have to consider an almost guaranteed 75% pay cut (incl. cost of living adjustment) to move. I have a British passport, I was born and grew up there until I was 25. I have a place to stay in London upon my arrival to help me get set up. I am legally allowed to take any job that would hire me. I still cannot justify the move. It's too much to ask of anyone. The reason the UK is not the tech giant the U.S. is, is that they don't take developers seriously. Until they stem the tide of developers leaving the UK for a decent income and cost of living, they're never ever going to have what the U.S. has. They don't need to legislate themselves into digital irrelevance, they're already digitally irrelevant, they just need to keep paying developers what they're paying them now.

pjc50 8y ago
Conversely, why are US tech companies not outsourcing more to drive up salaries?
- balabaster 8y ago
  Two reasons: 1. The top companies have finally managed to learn that outsourcing of your product to overseas companies drives the quality of the product into the ground. When you separate your project stakeholders and subject matter experts from your UX and development teams, shit falls to pieces in a hurry. 2. U.S. Tech companies don't give a shit about driving up global salaries, they give a shit about their own success and profits - right now. They already have a team fueling their success and they'd like to keep them close.
  - oarabbus_ 8y ago
    Outsourcing to low-quality shops in India drives the quality of the product into the ground. Outsouring to high-quality Indian firms, or to British/Euro firms, doesn't.

mnm1 8y ago

Perhaps Europe doesn't want giant corporations that pay no tax, create a few thousand decent jobs at most, and are in all other ways detrimental to society and all the other workers they employ. It seems to me like the laws are generally created to avoid this kind of predatory, vampiric corporation that Americans love so much in favor of corporations that work for workers rather than corporations that work only for their owners. But who knows? Certainly the lack of giant tech corporations is a feature, not a bug. Who wants a company like Facebook or Amazon that brings very little to society, pays no taxes, and creates very few well paying jobs sucking up resources for its own profit only when they can have an actual competitive economy and marketplace? Perhaps European regulators want to avoid the monopoly and oligopoly that dominate American markets, especially American tech markets.

sbacic 8y ago
I'm very, very wary of any corporations that "work in the interest of the workers". What that usually translates into (at least here) is the government subsidizing said corporations with public money. Case in point, a pair of shipyards are making the news because they (yet again) need a bailout in order to continue to function. "Think of the workers", "local business" and such are being thrown around. I just hope that this time the EU won't let the government waste taxpayer money.
- mnm1 8y ago
  That has nothing to do with it. I'm talking about providing decent wages, vacation, normal working hours, steady jobs, etc. Of course, these laws need to be implemented by the government but it has nothing to do with taking government funding.
  - sbacic 8y ago
    All of those things are required by law and apply to local companies and subsidiaries of US tech giants in equal measure, so I'm not quite sure what your point is. I, for one, would gladly exchange the current menagerie of dysfunctional local companies for FAANG subsidiaries. Microsoft pays some of the highest salaries here, doesn't need regular government bailouts and doesn't depend on rent-seeking to make its profit - which is more than I can say for many businesses here.

flexie 8y ago

Unless you are one of the founders or investors, there is little reason to rejoice in the current valuations of American tech companies. It has little to do with innovation and a lot to do with extremely lax regulation. What the world needs from tech is not just better AI or drones. The world needs tech to be regulated, and Europe, not the US, is currently providing more regulatory innovations: - how do we curb the emergence of giant tech corporations with finances the size of nation states that literally threatens democracies through lobbying and fake news? The US was there a hundred years ago with antitrust regulation but it seems like the US is not enforcing antitrust law anymore - how do we make those giant tech corporations pay fair share of tax? Again, the US used to tax it's corporations, but when it comes to tech, the US seems content with letting them hide their income in foreign tax shelters - how do we protect content creators like journalists from the giant tech corporations' completely free consumption of their work? - how do we regulate the so called "sharing economy" so that highly regulated industries such as hotels and taxis are not met with unfair competition by companies who's main innovation seems to be that they don't follow rules? - how do we secure the privacy of citizens?

sbacic 8y ago
I'm not rejoicing. I'm merely pointing out that, at least for me (and I dare say - most of Europeans that don't live in comfy western economies) is that most regulations are not all that important issues. They're more concerned over high taxes, poor public services, a mediocre economy and various societal issues (corruption, demographic collapse, lack of long-term economic planning...). As a person running a small business, I don't see these motions by the EU as "sticking up for the little guy" or looking out for local businesses. I see them as just more things to think about as I try to keep my business running and growing. Furthermore, I see a lot of talk about tax and fairness. I don't see a lot of talk about how that money is spent or what the benefits of running a European company are.
jdc 8y ago
"how do we curb the emergence of giant tech corporations with finances the size of nation states that literally threatens democracies [...]" I don't know, but this problem easily generalizes _all_ giant corporations.

deleted 8y ago

[deleted]

the_duke 8y ago

Privacy protections become more and more relevant with the ubiquity of information that companies process, store and share. Sure it adds work for companies, but that is a preferable trade off to the alternative. GDPR won't make the difference between a company being a large global player or not. Similarly, taxing companies that go to every possible extent to avoid it and hardly pay any taxes even though they are some of the largest companies in the world is hardly being "obsessed with finding ways to tax US internet giants as much as they can". I think a large reason for the lack of large European IT companies is the language and small/segmented markets problem. It's natural to start with your home country/market since that is were you are, were you have market insight, connections to get things going, .... But in Europe you have many countries with different languages, different currencies, tax schemes, regulations, and very different levels of income and prosperity. Expansion / internationalization is often a very cumbersome step by step process. Compared to the US where you have a large demographic with a single language, somewhat more unified regulation, and a big ecosystem of startups, things are a lot more challenging. Stricter employment protection and regulation in general, and the lack of the achievement and entrepreneurial culture certainly play a role though.