5 ms·

Imagine a government across the world asking you to sell a portion of your business. I’m not a fan of FB but I’d be laughing with Zuck in the board room at this

Imagine a government across the world asking you to sell a portion of your business. I’m not a fan of FB but I’d be laughing with Zuck in the board room at this one.

Denvercoder9 5y ago
It's not a random government across the world. Facebook does business in the UK market, has an office and personnel in the UK, and has customers in the UK.
- voidfunc 5y ago
  How relevant is the UK mow that it has exited the EU? If I am Facebook I pull out of the UK or at least threaten to do so. The general public will scream at their MPs to fix the problem.
  - colinmhayes 5y ago
    Downvoted but I think you're right. If Facebook calls their bluff here it's going to be extremely politically unpopular to actually shut them down.
    - blibble 5y ago
      remember: traditional media hates facebook there would be wall to wall coverage about facebook deciding the law doesn't apply to them
      - colinmhayes 5y ago
        And plenty of people hate traditional media. THere would be wall to wall ads from facebook about how they're being mistreated by the jealous traditional media and corrupt government.
        Apocryphon 5y ago
        People who hate the traditional media don't automatically like Facebook. They may be users of Facebook, but oftentimes the right hates them for censorship/moderation and the left hates them for corporate malfeasance.
    - stale2002 5y ago
      They don't have to shutdown facebook. All they have to do is put fines on them, until they comply. Facebook certainly has bank accounts in the UK. Its has offices and people working there. The UK could just take from that money.
  - danlugo92 5y ago
    > How relevant is the UK mow that it has exited the EU? Yeah, poor little UK, it's only the 5th biggest economy in the world after all, not like the 1st or 2nd!
    - gmueckl 5y ago
      You mean that tiny little UK that produces only around 2,5% of the gross world product? ;) Being fifth on a sorted list that is pretty long doesn't say much all by itself. The overall distribution matters, too. Seen that way, a successful company that is operating world wide and highly profitable could give up 2 to 3% of its revenue and continue to thrive. However, I don't see how companies alone have the power to openly strongarm governments. It would be a pretty foolish move. But withdrawing from a country's market to cut losses can be a correct move.
      - joshuaissac 5y ago
        Facebook's UK revenue in just one year (around £1.2b) is 4-5x what it paid to buy Giphy ($300-400m). They could exit the UK market just to spite the UK, but it makes no business sense to do so.
  - Teandw 5y ago
    Threating to pull out of the UK would have no effect for this matter. The CMA are basically saying that FB are breaking competition laws, so need to sell. They wouldn't able to say "Well, you're breaking the law but because you're threating to leave, we will let you get away with it."
    - londons_explore 5y ago
      But they can say "If you did leave, we could no longer ask you to sell". Giphy isn't big enough for that, but if for example the CMA requested that of Instagram, then it could be a good business decision to just leave the UK.
  - Balero 5y ago
    About 67 million potential users. Plus a large office of hundreds of staff members, lots of investment into people and real-estate, and billions of yearly revenue. About that relevant. Also I do not think the general public will scream at their MP's to fix this problem. Not many people say anything to their MP at all about anything, and hating FB is quite popular.
    - frockington1 5y ago
      If the US retaliates with tariffs or sanctions on UK companies, how long can the UK last before public outrage begins?
      - joshuaissac 5y ago
        The UK just left its largest export market (2.5x by annual export value compared to the US), which responded with tariffs. What public outrage there was was ignored. Why would this be any different?
      - Apocryphon 5y ago
        The current antitrust-curious U.S. administration teaming up with the U.K. government to rein in Meta would be a very amusing and cyberpunk thing to happen.
  - drumhead 5y ago
    The opinion of the UK competition regulator is well respected in the EU, so they'll use the analysis as the basis of any decision they might make in terms of this situation. As for Facebook pulling out of the UK, they're free to do so, you might get some complaints in but it'll be a storm that blows over in a short space of time. The danger for Facebook is shows the world what a country without Facebook would look like.
  - JumpCrisscross 5y ago
    > If I am Facebook I pull out of the UK or at least threaten to do so That wouldn’t do anything, legally speaking. The acquisition was under British jurisdiction when it happened. This is the U.K., not El Salvador. Its system is heavily integrated with America’s. If Facebook blew off the CMA, it could find relief in U.S. courts. Given how unpopular Facebook is, State would be unlikely to intervene on its behalf.
  - funshed 5y ago
    Given the UK is now more soverign over these matters and others, it is more relevent. No lobbying in EU will save companies now.
jedimastert 5y ago
It really doesn't matter where you're based, it matters where your market is and who controls it (or at least access to it). If they don't sell, they could be barred from doing business in the UK.
black_puppydog 5y ago
Sure, meta can refuse. Not sure what a regulator can do... to the part of facebook that's operating outside the UK. But at least in theory, any business they do within the UK could be shut down. Sure, they could still provide social networking services, those you won't be able to block. But selling ads or such? Only if you're willing to abide by the local regulations as a company. I mean, in theory at least...
tallanvor 5y ago
If you do business in a country, you have to accept that you're going to be subject to the laws of that country, and that clearly includes laws regarding competition. Facebook can probably appeal the ruling, but at the end of the day, if they want to keep doing business in the UK, they're going to have to comply with the decisions of the regulatory bodies there. The US has blocked mergers as well, and has retroactively forced acquisitions to be terminated. An example was Grindr selling a 60% stake of the company to the Chinese company Kunlun in 2016, Kunlun purchasing the rest of the company in January 2018, and CFIUS issuing a ruling in March 2019 that a Chinese company owning Grindr posed a national security risk and forcing them to sell the company (although finding a buyer and completing the sale took another year).
- worker767424 5y ago
  > If you do business in a country, you have to accept that you're going to be subject to the laws of that country Yes, but between actions like this and privacy regulations, being multinational is looking less and less workable. This isn't to say the regulations are bad, just that you can't have 100 jurisdictions with different policies trying to manage your company.
kahrl 5y ago
Imagine when doing business in multiple countries, you need to follow the laws of each. MIND BLOWN. IMAGINE. IMMMMMMAAAAGINE.
r00fus 5y ago
> Imagine a government across the world asking you to sell a portion of your business. Imagine getting booted from that market. If it is truly some rando govt, your financial impact will be negligible. If not... now you have to justify getting booted to your shareholders. That could be a very difficult exercise.

Imagine a government across the world asking you to sell a portion of your business. I’m not a fan of FB but I’d be laughing with Zuck in the board room at this one.

Denvercoder9 5y ago

It's not a random government across the world. Facebook does business in the UK market, has an office and personnel in the UK, and has customers in the UK.

voidfunc 5y ago
How relevant is the UK mow that it has exited the EU? If I am Facebook I pull out of the UK or at least threaten to do so. The general public will scream at their MPs to fix the problem.
- colinmhayes 5y ago
  Downvoted but I think you're right. If Facebook calls their bluff here it's going to be extremely politically unpopular to actually shut them down.
  - blibble 5y ago
    remember: traditional media hates facebook there would be wall to wall coverage about facebook deciding the law doesn't apply to them
    - colinmhayes 5y ago
      And plenty of people hate traditional media. THere would be wall to wall ads from facebook about how they're being mistreated by the jealous traditional media and corrupt government.
      - Apocryphon 5y ago
        People who hate the traditional media don't automatically like Facebook. They may be users of Facebook, but oftentimes the right hates them for censorship/moderation and the left hates them for corporate malfeasance.
  - stale2002 5y ago
    They don't have to shutdown facebook. All they have to do is put fines on them, until they comply. Facebook certainly has bank accounts in the UK. Its has offices and people working there. The UK could just take from that money.
- danlugo92 5y ago
  > How relevant is the UK mow that it has exited the EU? Yeah, poor little UK, it's only the 5th biggest economy in the world after all, not like the 1st or 2nd!
  - gmueckl 5y ago
    You mean that tiny little UK that produces only around 2,5% of the gross world product? ;) Being fifth on a sorted list that is pretty long doesn't say much all by itself. The overall distribution matters, too. Seen that way, a successful company that is operating world wide and highly profitable could give up 2 to 3% of its revenue and continue to thrive. However, I don't see how companies alone have the power to openly strongarm governments. It would be a pretty foolish move. But withdrawing from a country's market to cut losses can be a correct move.
    - joshuaissac 5y ago
      Facebook's UK revenue in just one year (around £1.2b) is 4-5x what it paid to buy Giphy ($300-400m). They could exit the UK market just to spite the UK, but it makes no business sense to do so.
- Teandw 5y ago
  Threating to pull out of the UK would have no effect for this matter. The CMA are basically saying that FB are breaking competition laws, so need to sell. They wouldn't able to say "Well, you're breaking the law but because you're threating to leave, we will let you get away with it."
  - londons_explore 5y ago
    But they can say "If you did leave, we could no longer ask you to sell". Giphy isn't big enough for that, but if for example the CMA requested that of Instagram, then it could be a good business decision to just leave the UK.
- Balero 5y ago
  About 67 million potential users. Plus a large office of hundreds of staff members, lots of investment into people and real-estate, and billions of yearly revenue. About that relevant. Also I do not think the general public will scream at their MP's to fix this problem. Not many people say anything to their MP at all about anything, and hating FB is quite popular.
  - frockington1 5y ago
    If the US retaliates with tariffs or sanctions on UK companies, how long can the UK last before public outrage begins?
    - joshuaissac 5y ago
      The UK just left its largest export market (2.5x by annual export value compared to the US), which responded with tariffs. What public outrage there was was ignored. Why would this be any different?
    - Apocryphon 5y ago
      The current antitrust-curious U.S. administration teaming up with the U.K. government to rein in Meta would be a very amusing and cyberpunk thing to happen.
- drumhead 5y ago
  The opinion of the UK competition regulator is well respected in the EU, so they'll use the analysis as the basis of any decision they might make in terms of this situation. As for Facebook pulling out of the UK, they're free to do so, you might get some complaints in but it'll be a storm that blows over in a short space of time. The danger for Facebook is shows the world what a country without Facebook would look like.
- JumpCrisscross 5y ago
  > If I am Facebook I pull out of the UK or at least threaten to do so That wouldn’t do anything, legally speaking. The acquisition was under British jurisdiction when it happened. This is the U.K., not El Salvador. Its system is heavily integrated with America’s. If Facebook blew off the CMA, it could find relief in U.S. courts. Given how unpopular Facebook is, State would be unlikely to intervene on its behalf.
- funshed 5y ago
  Given the UK is now more soverign over these matters and others, it is more relevent. No lobbying in EU will save companies now.

jedimastert 5y ago

It really doesn't matter where you're based, it matters where your market is and who controls it (or at least access to it). If they don't sell, they could be barred from doing business in the UK.

black_puppydog 5y ago

Sure, meta can refuse. Not sure what a regulator can do... to the part of facebook that's operating outside the UK. But at least in theory, any business they do within the UK could be shut down. Sure, they could still provide social networking services, those you won't be able to block. But selling ads or such? Only if you're willing to abide by the local regulations as a company. I mean, in theory at least...

tallanvor 5y ago

If you do business in a country, you have to accept that you're going to be subject to the laws of that country, and that clearly includes laws regarding competition. Facebook can probably appeal the ruling, but at the end of the day, if they want to keep doing business in the UK, they're going to have to comply with the decisions of the regulatory bodies there. The US has blocked mergers as well, and has retroactively forced acquisitions to be terminated. An example was Grindr selling a 60% stake of the company to the Chinese company Kunlun in 2016, Kunlun purchasing the rest of the company in January 2018, and CFIUS issuing a ruling in March 2019 that a Chinese company owning Grindr posed a national security risk and forcing them to sell the company (although finding a buyer and completing the sale took another year).

worker767424 5y ago
> If you do business in a country, you have to accept that you're going to be subject to the laws of that country Yes, but between actions like this and privacy regulations, being multinational is looking less and less workable. This isn't to say the regulations are bad, just that you can't have 100 jurisdictions with different policies trying to manage your company.

kahrl 5y ago

Imagine when doing business in multiple countries, you need to follow the laws of each. MIND BLOWN. IMAGINE. IMMMMMMAAAAGINE.

r00fus 5y ago

> Imagine a government across the world asking you to sell a portion of your business. Imagine getting booted from that market. If it is truly some rando govt, your financial impact will be negligible. If not... now you have to justify getting booted to your shareholders. That could be a very difficult exercise.