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Will future tech companies bother making their products available in the EU? Will it be worth it, or is just too big of a risk with uncertain outcomes?

miohtama 2y ago
For Facebook for sure, as they are eating the lunch of local medias by being able to serve smaller advertisers with more targeted campaigns.
Johanx64 2y ago
Except for VR headsets, I reject the notion that facebook/meta is a "tech" company.
- chung8123 2y ago
  They have done a ton of advancement in AI. They also have to have the infrastructure to handle so many users. I feel like they fall squarely in the tech company world.
- zeroonetwothree 2y ago
  Do you think “tech” excludes software or something? That wouldn’t be a normal definition.
  - Johanx64 2y ago
    Does running a website automatically mean you are a "tech" company? Or does it become "tech" company just because you need to buy a whole lot of servers to store all the hoarded user data that later is sold out to advertisers? What's the exact number of servers where running a website becomes a "tech company"?
philjohn 2y ago
It's a large market, and more profitable than APAC and RoW per user (just look at the Meta investor presentations which show that it's US, followed by the EU then APAC and RoW[1]). [1] https://s21.q4cdn.com/399680738/files/doc_financials/2024/q3/Earnings-Presentation-Q3-2024.pdf https://s21.q4cdn.com/399680738/files/doc_financials/2024/q3...
- jahabrewer 2y ago
  The slide I see says _revenue_. I think you have to consider cost of revenue too, and these EU fines affect that. So if the EU goes to fines being "% of worldwide turnover"... do the math
jsnell 2y ago
It's funny that there are two common and opposite narratives in HN comments for EU fines on tech companies. The is to claim that the fines are far too small, and the companies will happily just continue breaking the laws and treat the fines as a cost of doing business. The other is that the fines are so impractically huge that they're going to drive the companies out of the EU entirely. Both narratives are just nonsense. The goal of the fines is to change product behavior immediately, and to act as a deterrent for illegal product changes in the future. The fines seem pretty well calibrated for that. $1 billion is real money even to Meta. They can't afford to ignore this and other similar issues, and will need to at least make an effort that looks like good faith enough to avoid the fines ratcheting up higher. But on the other hand, Meta probably makes on the order of $10 billion / year in profit in the EU. They're not about to leave. Like, even in that one year (2018?) when Google ended up adding a separate line item for EU antitrust fines into their financial statements there was no chance they'd leave.
- xvector 2y ago
  Except the change the EU is trying to encourage with this ruling is really absurdly dumb. It's clearly and transparently rent seeking. We are already in a trade war and the only one that refuses to acknowledge it is the US. The US needs to embargo and deprive EU of the essential tech infrastructure they provide it. Just turn it off or brick it one day and leave the EU scrambling to catch up with 20+ years of stagnation and missing services and hardware. Let's see how good it will be for the consumer when tech just leaves. Maybe then they'll change their regulations to something that works to enable technological progress and innovation.
  - aeurielesn 2y ago
    GP forgot this narrative where breaking laws enables technological progress and innovation.
  - PeterStuer 2y ago
    And should the EU then compell SAP to retaliate in kind? You can argue the EU is more a serv than an ally to the US, but they still need them on their side. The number of times you can pull a Nordstream are preciously limited.
bantunes 2y ago
Telling that you think this is happening just because their products are available in the EU and not because they were "acting in a way that gave it a significant advantage over competitors" as the EU claims.
max51 2y ago
The outcome is only uncertain because they are blatantly ignoring the laws.
maronato 2y ago
Will future pharma companies bother with creating new drugs if they have to get FDA approval? Will engineering companies bother drafting new projects if they have to pass safety inspections? Every other industry thrives despite regulations. It’ll be no different for future tech companies.
- xvector 2y ago
  If you have ever worked in pharma you know that literally thousands of promising drugs have been left on the table because the regulatory costs/burdens to see the ideas through are simply too high. It is maybe one of the greatest travesties in the sphere of human health. At this point, only the easiest and most obvious wins are worth pushing through the regulatory gauntlet. Innovation has been strangled. It's not even worth trying something unless you are 110% certain the costs will be recouped and it's worth spending billions to get it approved.
whazor 2y ago
It is a much bigger risk to leave the market and to potentially gain a scary competitor.

miohtama 2y ago

For Facebook for sure, as they are eating the lunch of local medias by being able to serve smaller advertisers with more targeted campaigns.

Johanx64 2y ago

Except for VR headsets, I reject the notion that facebook/meta is a "tech" company.

chung8123 2y ago
They have done a ton of advancement in AI. They also have to have the infrastructure to handle so many users. I feel like they fall squarely in the tech company world.
zeroonetwothree 2y ago
Do you think “tech” excludes software or something? That wouldn’t be a normal definition.
- Johanx64 2y ago
  Does running a website automatically mean you are a "tech" company? Or does it become "tech" company just because you need to buy a whole lot of servers to store all the hoarded user data that later is sold out to advertisers? What's the exact number of servers where running a website becomes a "tech company"?

philjohn 2y ago

It's a large market, and more profitable than APAC and RoW per user (just look at the Meta investor presentations which show that it's US, followed by the EU then APAC and RoW[1]). [1] https://s21.q4cdn.com/399680738/files/doc_financials/2024/q3/Earnings-Presentation-Q3-2024.pdf https://s21.q4cdn.com/399680738/files/doc_financials/2024/q3...

jahabrewer 2y ago
The slide I see says _revenue_. I think you have to consider cost of revenue too, and these EU fines affect that. So if the EU goes to fines being "% of worldwide turnover"... do the math

jsnell 2y ago

It's funny that there are two common and opposite narratives in HN comments for EU fines on tech companies. The is to claim that the fines are far too small, and the companies will happily just continue breaking the laws and treat the fines as a cost of doing business. The other is that the fines are so impractically huge that they're going to drive the companies out of the EU entirely. Both narratives are just nonsense. The goal of the fines is to change product behavior immediately, and to act as a deterrent for illegal product changes in the future. The fines seem pretty well calibrated for that. $1 billion is real money even to Meta. They can't afford to ignore this and other similar issues, and will need to at least make an effort that looks like good faith enough to avoid the fines ratcheting up higher. But on the other hand, Meta probably makes on the order of $10 billion / year in profit in the EU. They're not about to leave. Like, even in that one year (2018?) when Google ended up adding a separate line item for EU antitrust fines into their financial statements there was no chance they'd leave.

xvector 2y ago
Except the change the EU is trying to encourage with this ruling is really absurdly dumb. It's clearly and transparently rent seeking. We are already in a trade war and the only one that refuses to acknowledge it is the US. The US needs to embargo and deprive EU of the essential tech infrastructure they provide it. Just turn it off or brick it one day and leave the EU scrambling to catch up with 20+ years of stagnation and missing services and hardware. Let's see how good it will be for the consumer when tech just leaves. Maybe then they'll change their regulations to something that works to enable technological progress and innovation.
- aeurielesn 2y ago
  GP forgot this narrative where breaking laws enables technological progress and innovation.
- PeterStuer 2y ago
  And should the EU then compell SAP to retaliate in kind? You can argue the EU is more a serv than an ally to the US, but they still need them on their side. The number of times you can pull a Nordstream are preciously limited.

bantunes 2y ago

Telling that you think this is happening just because their products are available in the EU and not because they were "acting in a way that gave it a significant advantage over competitors" as the EU claims.

max51 2y ago

The outcome is only uncertain because they are blatantly ignoring the laws.

maronato 2y ago

Will future pharma companies bother with creating new drugs if they have to get FDA approval? Will engineering companies bother drafting new projects if they have to pass safety inspections? Every other industry thrives despite regulations. It’ll be no different for future tech companies.

xvector 2y ago
If you have ever worked in pharma you know that literally thousands of promising drugs have been left on the table because the regulatory costs/burdens to see the ideas through are simply too high. It is maybe one of the greatest travesties in the sphere of human health. At this point, only the easiest and most obvious wins are worth pushing through the regulatory gauntlet. Innovation has been strangled. It's not even worth trying something unless you are 110% certain the costs will be recouped and it's worth spending billions to get it approved.

whazor 2y ago

It is a much bigger risk to leave the market and to potentially gain a scary competitor.