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What bearing does their global revenue have on what Ireland has any jurisdiction to fine them? I'm not a fan or user of TikTok, but what they earn on other cont

What bearing does their global revenue have on what Ireland has any jurisdiction to fine them? I'm not a fan or user of TikTok, but what they earn on other continents is none of Ireland's business.

dmos62 1y ago
These are global companies. Why pretend you're only dealing with a small fragment of it? I don't see a reason to be overly conservative.
_Algernon_ 1y ago
They choose to operate here. Of course it is Ireland's business.
DrScientist 1y ago
The Irish regulator is acting on behalf of the EU as TikTok European head quarters are in Ireland. And in terms of jurisdiction - it's a bit like you visiting Ireland on holiday and committing a crime - and then arguing they have no jurisdiction over you as you are only there for 2 weeks.
- _Algernon_ 1y ago
  A more apt comparison is that you get a fine for speeding abroad, and argue that you don't have to pay it because you earned that money in your home country. It's ridiculous.
- AlchemistCamp 1y ago
  Sure, it's fine for Ireland to punish someone for a crime committed in Ireland, but my question was about what bearing revenue earned on other continents was any business of Ireland's. A more accurate version of your analogy would be Ireland choosing to punish a tourist for littering with a dramatically higher penalty than native Irish would face based on their New York salary.
  - relistan 1y ago
    Because, like many other tech companies, Tiktok is funneling most of their global revenue through Ireland where the corporate tax rate is very low. I don't know the specifics of the mechanism used by Tiktok. But, most companies do this by registering all of their IP through their Irish company and then paying licensing fees to the Irish entity that just happen to be all of their profit abroad. This is why the Irish regulator punches way above its weight globally and is why it is often the entry point for EU regulation on foreign firms.
    - AlchemistCamp 1y ago
      Maybe Alibaba is a better example. Why should Alibaba increasing its global revenue through growth in the Chinese market mean that Ireland should fine it more? If it's because earnings in Ireland or even maybe the entire EU went up, then I can see the justification. But if Alibaba's revenue is going up because of Alibaba improving logistics within China, why should Ireland get anything for that?
      - relistan 1y ago
        In Tiktok's case it's because the revenue is actually flowing through Ireland. EDIT: here's more about the general mechanism I'm referring to https://archive.is/0hcAK https://archive.is/0hcAK
        AlchemistCamp 1y ago
        One of TikTok’s largest markets is Japan. Their shop revenues in particular, doubled in Japan last year. Those earnings are taxed locally and have nothing to do with Ireland.
        relistan 1y ago
        I suggest reading the link I posted.
graemep 1y ago
Ireland was acting on behalf of the EU, so at the very least the fine should be substantial relative to EU revenues. The law does say global revenues, and I think that is a deterrent to treating fines as just a cost of doing business.
- AlchemistCamp 1y ago
  Yeah, relative to EU revenues would be fairly reasonable.
noirscape 1y ago
It's a case involving their European customers. If you do business in Europe, there's a bunch of (good!) privacy regulations you have to comply with. One of these is that you're not allowed to transfer the data to a jurisdiction that doesn't follow equivalent protections to the GDPR[0]. TikTok transferred European user data to their Chinese servers, which is a pretty obvious no-go, since the Chinese government is an authoritarian watchdog that inherently can't guarantee these protections (as the GDPR also applies to transferring data to the government.) Ireland has jurisdiction because the EU offers something called the "one stop shop" concept, where a foreign company can declare that they have EU headquarters in a specific member state, and from that point on the only EU regulations they have to directly worry about are how they're implemented in that country in specific[1]. Every major tech company is therefore in Ireland because the country is small enough to essentially steamroll local politicians with lobby money, leading to very lax enforcement until the EU starts applying pressure.[2] [0]: This also causes issues with data transfers to the US, and in the most extreme interpretation, makes it so that you probably can't do business with both Europe and the US at the same time in the first place. This is because of the CLOUD act, which goes across jurisdictions and is something the US government can use to compel any service provider to hand over data. [1]: Of course, a country can still have it's own laws that a company can run afoul of on top of that. [2]: Other countries with this issue are Luxembourg (Fintech companies love Luxembourg because they can just hire all the good lawyers, meaning you can't negotiate legal disputes there effectively) and the Netherlands (which is a EU-based tax haven for large corporations that aren't in either sector.)
- docdeek 1y ago
  Do you know if there is a reason they would not domicile in Malta? It's an EU Member State, English speaking, and if buying off politicians in Ireland is easy, it must be easier in Malta with a population of only 550,000 people.
  - noirscape 1y ago
    My guess is just physical/lazy reasons. Before this, they were homed in the UK, whose special arrangements meant that they could avoid a lot of EU regulations that way. Then Brexit happened and they just moved to the nearest available option.
andrepd 1y ago
A fine is supposed to be a deterrent to illegal behaviour. Much like a fine of 100€ for speeding is unlikely to dissuade someone driving a Ferrari, a fine directed towards a company needs to be proportional to that company's revenue, or else it will just be factored as a cost of doing business. How much value did tiktok derive from flaunting these privacy laws? It's not entirely unlikely that it was less than 530M€.
b112 1y ago
Absurd. Damages need to be inline with 'how to force corrective behaviour'. They are to be designed to FORCE the company to change how they are behaving. If their global revenue was $1000, and the local revenue is $1, fining them $0.10 isn't going to help much.
netdevphoenix 1y ago
If you breach a regulation or commit a crime in a jurisdiction, your behaviour in other jurisdictions WILL be considered during your judicial process.
deleted 1y ago
[deleted]
trollbridge 1y ago
Ireland's business is whatever Ireland wants it to be, if TikTok wants the pleasure of being allowed to operate in Ireland jurisdictions. And yes, everything a multi-billion dollar company does is indeed the government's business - and the people's business. We have a right to regulate them as we see fit.
- curiousObject 1y ago
  >Ireland's business is whatever Ireland wants it to be Ireland offers a favorable tax and regulatory environment, within the EU, so this punishment is not only Ireland’s business. It represents the EU.
scott_w 1y ago
Why not? A country can, for the most part, set whatever level of fines they want within law. You can make an argument about the practicality of any given punishment but that's separate from the morality (which, from the tone of your comment, I assume is where you're coming from).
- AlchemistCamp 1y ago
  Sure. A country can set "whatever level of fines they want within law". For example, Russia assessed a $20,000,000,000,000,000,000,000,000,000,000,000 against Google. https://edition.cnn.com/2024/10/31/tech/google-fines-russia/index.html https://edition.cnn.com/2024/10/31/tech/google-fines-russia/... At the base level, I suppose my point was about morality, but my intent was about rationality. A country can write laws that it can take all the money a company earns across the entire globe, but it's not a very reasonable position, IMO.
  - scott_w 1y ago
    Why is it not reasonable? Because it outweighs the harm? Because it could shut down a company? Because it’s unenforceable? Because of some “it looks silly to me” standard? I can tell you Russia’s “fine” is not reasonable because it’s not enforceable and exists to be purely performative. It’s not the same thing as Ireland putting a fine based on global revenue but still within their power to enforce.
rsynnott 1y ago
These secrets are contained deep within the article, which of course it is highly improper to read on this here orange website: > The Irish national watchdog serves as TikTok’s lead data privacy regulator in the 27-nation EU because the company’s European headquarters is based in Dublin. This is likely under the GDPR, whose penalties are based on global revenue. If TikTok doesn't like it, it is of course free to cease activity in Europe (strictly speaking the GDPR also protects European citizens outside of Europe, but in practice if a company doesn't operate in Europe there is little that the EU can do).

What bearing does their global revenue have on what Ireland has any jurisdiction to fine them? I'm not a fan or user of TikTok, but what they earn on other continents is none of Ireland's business.

dmos62 1y ago

These are global companies. Why pretend you're only dealing with a small fragment of it? I don't see a reason to be overly conservative.

_Algernon_ 1y ago

They choose to operate here. Of course it is Ireland's business.

DrScientist 1y ago

The Irish regulator is acting on behalf of the EU as TikTok European head quarters are in Ireland. And in terms of jurisdiction - it's a bit like you visiting Ireland on holiday and committing a crime - and then arguing they have no jurisdiction over you as you are only there for 2 weeks.

_Algernon_ 1y ago
A more apt comparison is that you get a fine for speeding abroad, and argue that you don't have to pay it because you earned that money in your home country. It's ridiculous.
AlchemistCamp 1y ago
Sure, it's fine for Ireland to punish someone for a crime committed in Ireland, but my question was about what bearing revenue earned on other continents was any business of Ireland's. A more accurate version of your analogy would be Ireland choosing to punish a tourist for littering with a dramatically higher penalty than native Irish would face based on their New York salary.
- relistan 1y ago
  Because, like many other tech companies, Tiktok is funneling most of their global revenue through Ireland where the corporate tax rate is very low. I don't know the specifics of the mechanism used by Tiktok. But, most companies do this by registering all of their IP through their Irish company and then paying licensing fees to the Irish entity that just happen to be all of their profit abroad. This is why the Irish regulator punches way above its weight globally and is why it is often the entry point for EU regulation on foreign firms.
  - AlchemistCamp 1y ago
    Maybe Alibaba is a better example. Why should Alibaba increasing its global revenue through growth in the Chinese market mean that Ireland should fine it more? If it's because earnings in Ireland or even maybe the entire EU went up, then I can see the justification. But if Alibaba's revenue is going up because of Alibaba improving logistics within China, why should Ireland get anything for that?
    - relistan 1y ago
      In Tiktok's case it's because the revenue is actually flowing through Ireland. EDIT: here's more about the general mechanism I'm referring to https://archive.is/0hcAK https://archive.is/0hcAK
      - AlchemistCamp 1y ago
        One of TikTok’s largest markets is Japan. Their shop revenues in particular, doubled in Japan last year. Those earnings are taxed locally and have nothing to do with Ireland.
        relistan 1y ago
        I suggest reading the link I posted.

graemep 1y ago

Ireland was acting on behalf of the EU, so at the very least the fine should be substantial relative to EU revenues. The law does say global revenues, and I think that is a deterrent to treating fines as just a cost of doing business.

AlchemistCamp 1y ago
Yeah, relative to EU revenues would be fairly reasonable.

noirscape 1y ago

It's a case involving their European customers. If you do business in Europe, there's a bunch of (good!) privacy regulations you have to comply with. One of these is that you're not allowed to transfer the data to a jurisdiction that doesn't follow equivalent protections to the GDPR[0]. TikTok transferred European user data to their Chinese servers, which is a pretty obvious no-go, since the Chinese government is an authoritarian watchdog that inherently can't guarantee these protections (as the GDPR also applies to transferring data to the government.) Ireland has jurisdiction because the EU offers something called the "one stop shop" concept, where a foreign company can declare that they have EU headquarters in a specific member state, and from that point on the only EU regulations they have to directly worry about are how they're implemented in that country in specific[1]. Every major tech company is therefore in Ireland because the country is small enough to essentially steamroll local politicians with lobby money, leading to very lax enforcement until the EU starts applying pressure.[2] [0]: This also causes issues with data transfers to the US, and in the most extreme interpretation, makes it so that you probably can't do business with both Europe and the US at the same time in the first place. This is because of the CLOUD act, which goes across jurisdictions and is something the US government can use to compel any service provider to hand over data. [1]: Of course, a country can still have it's own laws that a company can run afoul of on top of that. [2]: Other countries with this issue are Luxembourg (Fintech companies love Luxembourg because they can just hire all the good lawyers, meaning you can't negotiate legal disputes there effectively) and the Netherlands (which is a EU-based tax haven for large corporations that aren't in either sector.)

docdeek 1y ago
Do you know if there is a reason they would not domicile in Malta? It's an EU Member State, English speaking, and if buying off politicians in Ireland is easy, it must be easier in Malta with a population of only 550,000 people.
- noirscape 1y ago
  My guess is just physical/lazy reasons. Before this, they were homed in the UK, whose special arrangements meant that they could avoid a lot of EU regulations that way. Then Brexit happened and they just moved to the nearest available option.

andrepd 1y ago

A fine is supposed to be a deterrent to illegal behaviour. Much like a fine of 100€ for speeding is unlikely to dissuade someone driving a Ferrari, a fine directed towards a company needs to be proportional to that company's revenue, or else it will just be factored as a cost of doing business. How much value did tiktok derive from flaunting these privacy laws? It's not entirely unlikely that it was less than 530M€.

b112 1y ago

Absurd. Damages need to be inline with 'how to force corrective behaviour'. They are to be designed to FORCE the company to change how they are behaving. If their global revenue was $1000, and the local revenue is $1, fining them $0.10 isn't going to help much.

netdevphoenix 1y ago

If you breach a regulation or commit a crime in a jurisdiction, your behaviour in other jurisdictions WILL be considered during your judicial process.

deleted 1y ago

[deleted]

trollbridge 1y ago

Ireland's business is whatever Ireland wants it to be, if TikTok wants the pleasure of being allowed to operate in Ireland jurisdictions. And yes, everything a multi-billion dollar company does is indeed the government's business - and the people's business. We have a right to regulate them as we see fit.

curiousObject 1y ago
>Ireland's business is whatever Ireland wants it to be Ireland offers a favorable tax and regulatory environment, within the EU, so this punishment is not only Ireland’s business. It represents the EU.

scott_w 1y ago

Why not? A country can, for the most part, set whatever level of fines they want within law. You can make an argument about the practicality of any given punishment but that's separate from the morality (which, from the tone of your comment, I assume is where you're coming from).

AlchemistCamp 1y ago
Sure. A country can set "whatever level of fines they want within law". For example, Russia assessed a $20,000,000,000,000,000,000,000,000,000,000,000 against Google. https://edition.cnn.com/2024/10/31/tech/google-fines-russia/index.html https://edition.cnn.com/2024/10/31/tech/google-fines-russia/... At the base level, I suppose my point was about morality, but my intent was about rationality. A country can write laws that it can take all the money a company earns across the entire globe, but it's not a very reasonable position, IMO.
- scott_w 1y ago
  Why is it not reasonable? Because it outweighs the harm? Because it could shut down a company? Because it’s unenforceable? Because of some “it looks silly to me” standard? I can tell you Russia’s “fine” is not reasonable because it’s not enforceable and exists to be purely performative. It’s not the same thing as Ireland putting a fine based on global revenue but still within their power to enforce.

rsynnott 1y ago

These secrets are contained deep within the article, which of course it is highly improper to read on this here orange website: > The Irish national watchdog serves as TikTok’s lead data privacy regulator in the 27-nation EU because the company’s European headquarters is based in Dublin. This is likely under the GDPR, whose penalties are based on global revenue. If TikTok doesn't like it, it is of course free to cease activity in Europe (strictly speaking the GDPR also protects European citizens outside of Europe, but in practice if a company doesn't operate in Europe there is little that the EU can do).