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> If they were ever to be acquired by a corporate with a presence in the EU, it would inherit that liability and be forced to pay or exit the EU. Absolutely, b
by troad 4y ago
> If they were ever to be acquired by a corporate with a presence in the EU, it would inherit that liability and be forced to pay or exit the EU.
Absolutely, but that wouldn't really affect the vast majority of smaller or mid-sized businesses in the US and China (and elsewhere). Not everyone is looking for an exit. You're absolutely right for major public companies, and I doubt we'll see them doing anything like this. (Though eventually some could withdraw from Europe altogether if it ceases to make economic sense to be in compliance.)
> If sufficiently provoked, the EU could also issue sanctions against any other company doing business with them in the mean time.
Hmm, this seems fairly unlikely for a smaller or mid-sized business. Possible, certainly, but unlikely.
> Eventually most first-world banks are loath to touch the business.
This one though, I very much doubt. Why would a regional US bank refuse to lend to a local mid-sized B2B supplier with good credit and in good standing, just because the Latvian privacy authority is upset with them for practices that are entirely legal and ordinary in the US?
More broadly though, I am genuinely curious where one would draw the line on foreign compliance. Any business anyone starts is presumably out of compliance with North Korean law, but (understandably) this is kind of just ignored. What about Tajik law though? Or South African law? I presume there's a balancing act involved with these decisions, but say there is a hypothetical Chinese entity that just doesn't have very much exposure to EU markets: getting them to comply with (potentially onerous) EU regulations could become an increasingly hard sell.
I'm not saying this is a desirable outcome, to be clear, I just wonder at what point the incentives will cease to align and we'll begin to see more non-compliance by non-EU entities with EU regulation.
- pg_1234 4y ago> This one though, I very much doubt. Why would a regional US bank refuse to lend to a local mid-sized B2B supplier with good credit and in good standing, just because the Latvian privacy authority is upset with them for practices that are entirely legal and ordinary in the US? A bank would be hesitant (but not necessarily totally unwilling) to loan money to a business if the EU (not if it's just Latvia) has a massive outstanding financial claim against it as there is an increased risk of a situation where the business uses bankruptcy law to discharge it's liabilities ... and, as mentioned some merger/acquisition paths are blocked ... it's a risk thing, and it depends on the business, but it's baggage you really don't want. > More broadly though, I am genuinely curious where one would draw the line on foreign compliance. Any business anyone starts is presumably out of compliance with North Korean law, but (understandably) this is kind of just ignored. What about Tajik law though? Or South African law? I presume there's a balancing act involved with these decisions, but say there is a hypothetical Chinese entity that just doesn't have very much exposure to EU markets: getting them to comply with (potentially onerous) EU regulations could become an increasingly hard sell. Ultimately it comes down to power plays between major trading blocks with agreements to respect each others laws to some degree, so Tajik or South African law can be largely ignored, China less so, USA or EU even less. We're already seen what it looks like, i.e. when the USA would sanction foreign businesses that dealt with Iran. Now the USA has weakened and can't play globocop anymore, these days it's a 3 way standoff between the USA, EU and China ... less unilateral, more haggling.