The EU's biggest fines on tech companies | Hacker News Reader

The EU's biggest fines on tech companies

money.cnn.com

47 pointsAnatMl258 comments

I find it a bit strange that these issues arouse such strong feelings of patriotism in some posters - to take the example of Apple, weren't they keeping billions of dollars offshore to avoid US taxes, and isn't that a thoroughly unpatriotic act? You could argue US consumers also benefit from many of these rulings.

Also if I were to indulge in a little whataboutism I would point out that many accuse the US of far worse in exploiting vulnerable debtor countries through the World Bank and IMF; the idea of the poor, defencelessness US megacorp at the mercy of the villanous EU is risible.

Would it be cheaper for those companies to walk away from european market?

Depends upon their European operations. Considering the size of the European market, probably not.

most of them make about 40-60% of revenue from Europe so go figure! Playing by the rules is not really that expensive. The fines they are getting are really small compared with the profits they are making.

It depends very much on the definition of "walk away".

Europeans use America-only firms all the time and can easily make cross border payments. There aren't really robust ways to stop US firms selling to the EU over the internet especially for services, which are excluded from tariffs via GATT.

Whilst I don't think we'll see established firms "walk away" in the sense of closing down their EU offices, I think it's extremely likely that the next generation of startups will simply never choose to open offices in the EU to begin with. Sort of like how many companies ignore the Chinese market today because the problems that come with it offset the appeal of a large (much, much more captive) market.

> There aren't really robust ways to stop US firms selling to the EU over the internet especially for services, which are excluded from tariffs via GATT.

It’s rather easy to seize transfers made to foreign companies in violation of a local law. So while that foreign company then wouldn’t have to have a presence in the EU, it also couldn’t receive payments from EU companies or customers.

Much the same way the US will complain if you transfer funds out of the US to terrorists or drug lords or whoever is politically unfavourable today.

Or maybe more likely just wait until they have an established and successful business in the USA first and only then expand to Europe if it makes sense.

There are really robust ways of stopping American countries from selling to EU citizens. Financial transactions are easily tracked and blocked. So are websites. If nothing works, then the EU can stop trading and kick American payment companies out.

There was an implicit assumption in my post that the EU wouldn't go full totalitarian and establish a new iron curtain.

Yes, if it is willing to go down that route it can seal off people from America entirely. But the fact that people are even seriously proposing this is the best argument for Brexit yet.

You are contradicting yourself. The fines are indeed small relative to the profits they are making. That’s exactly why playing by the rules is very expensive for them.

This comment is interesting as we have this "issue" of people running away from France no to pay taxes in their own country. When you don't want to play by the rules, can you afford to ignore them (legally)? Ethically it's obviously not cool, but if there is indeed a outflux of people due to heavy regulations then it becomes a problem for the country. Not sure if people running away because of taxes represent an important number (intuitively I feel like no)

I think the term is Tax Exile, and they weren't popular in the UK either, but I'm not sure anyone cares that much anymore after countless tax evasion type scandals. Short of reverting to Soviet style repression I'm not sure what you can do to force the rich to stay in France if they don't want to. Politicians always target the middle class as the rich can manipulate the system to avoid paying, and the poor have nothing for the government to steal.

The European market which is larger than the US market?

I'd say not.

No,

It would hopefully be cheaper to follow the law. If not I'll vote for higher fines :)

All the highlighted cases seem entirely reasonable uses of regulation to me.

Do we want companies to be free to take payments from Intel to not use AMD, or run a cartel?

The microsoft ones? Where they werent allowed to package their media player with windows?

Isnt itunes/apple significantly worse in the freedom to choose your software?

Apple didn't/doesn't have a monopoly. Anti-trust rules are meant to encourage competition/restrain monopolists in order to help consumers (as stronger competition = win for consumers).

You can argue whether or not that's "fair" for monopolists, just like you can argue that it's not fair that your taxes are redistributed to pay for someone else' kid to go to school or get healthcare, but that is the goal of anti-trust.

But in my humble opinion, nobody should ever cry for a monopolist making billions of dollars a year.

>Isnt itunes/apple significantly worse in the freedom to choose your software?

It's not about choosing your software. You can restrict the software in your platform as much as you want.

Just not when you have a monopoly. MS at the time was at 95%+ of the market.

As long as there's anybody else with a large chunk, you can do whatever you like restrictions wise. Anybody that don't like it can go there.

Now we have Linux as a viable option as well.

Not convinced Linux is a viable option. For the average consumer it needs to come installed by the manufacturer and a quick look at dell.ie shows the cheapest Ubuntu laptop @ €1168 ($1365)

> Isnt itunes/apple significantly worse in the freedom to choose your software?

Yes they are, and it's upsetting - but, sadly, with apple not being in a monopoly position, not illegal.

The difference here is that Apple doesn't sell or distribute their MacOS to other PC OEMs and dictate to them with how and what software packages they ought to ship their PCs.

In another word, Apple is free to do whatever it feels like as long as they do it on their own hardware or at Apple retail stores.

Companies not playing by the rules are fined, shocker.

Guess we will have the same outrage when(if) GDPR hits, despite said tech companies are fully aware they are blatantly non compliant.

Amazing that the EU is able to levy multi-billion dollar fines basically for attempting to monetize a free operating system, whereas in the US and Britain, felony conspiracies, price-fixing, and fraud get milquetoast slaps on the wrist.

Don't forget the tech cartel that suppressed wages by non-poaching agreements.

Several of the most prominent tech employers in the US illegally colluded for years to deprive employees of billions of dollars of wages.

It was an open and shut case, with chief executives going on record about this illegal collusion.

Result? Department of Labor investigates, finds them guilty... and they get a slap on the wrist for the tune of a few million dollars.

To repeat, this collusion is a crime by US law. It's a violation of Section One of the Sherman Act.

In the US, the legal balance of power has been tipped for decades in favor of employers: non-competes, mandatory arbitration agreements (which practically mean you can't sue your employer no matter how badly they mistreat you), etc. Both the laws themselves and their enforcement have steadily moved to favor and empower employers, while employees are deprived of any benefit of the legal system or their most basic rights (such as to change jobs).

Most of us live in a bubble because we are engineers and work in California, which is relatively labor-friendly. Just wait until you get into a serious disagreement with your employer, or seek employment outside of California, say in New York or Seattle, where both non-competes and forced arbitration are perfectly enforceable.

Yeah, but the the most shocking thing is the countless apologists for Microsoft, Apple, Google, Intel, etc.

These companies were/are breaking the law and hurting societies and people through their greedy behaviour, and some criticize the EU for rightly punishing them.

This kind of brainwashed behaviour is very very concerning. The corporations have succeeded in changing the environment in which people grow up and thereby manipulated them to protect the corporation like a discardable, yet useful drone.

I know a great way to monetize an operating system: charging money for licenses.

But this has some problems... buyers will make more demands instead of just taking things as they are because, "hey, it's free"! They might also decide it's too expensive and look for other providers, say like Jolla, Ubuntu or FirefoxOS.

Charging money is pretty awesome for creating a vibrant mobile OS market, but it sucks for creating a mobile OS monopoly as a vehicle for ads.

?? Apple paid $400+M for the e-book price-fixing scandal not too long ago. I do agree though that the US regulators and the court system are a tad bit lenient on domestic companies. It's even worse when it comes to patent cases involving foreign vs domestic companies.

These kind of regulations is just another form of protectionism.

Is any make the life of Europeans easier? I don’t think so. It did kill any risks of having a real EU startup ecosystem despite being the first economy zone in the world.

All these rulings are applications of laws, they apply equally to all.

This is not protectionism. The EU is all about free and fair trade.

In fact the illegal tax schemes the EU have been fighting is very much a form of protectionism. One country may NOT give favorable tax incentives inorder to protect investments coming in.

You don’t seem to know what the word “protectionism” means. Tax incentives are not protectionism.

How is unfair tax incentives different from direct subsidies?

1. Unfair according to whom? You're presenting your opinion as if it were fact.

2. To put it bluntly, the fact that you equate tax incentives with direct subsidies suggests you don't understand economics. https://mises.org/library/no-tax-breaks-are-not-subsidies

1) Fair point..

In the EU we have laws against using tax incentives to lure companies to specific countries or cities. Unlike the US where Amazon is currently picking the location it's next headquarters based on what tax incentives Amazon can get.

This kind of race to the bottom is not permitted. Yet, certain EU countries have been finding ways around it to attract/retrain specific business..

At least that's my impression.

Like the extremely favourable tax incentive given to Amazon by the EU President, back when he was Prime Minister of Luxembourg?

[1] https://www.theguardian.com/world/2014/dec/10/juncker-amazon...

Protectionism? AMD reported the Intel case, Sun and Novell the Media player one. Philips are from the Netherlands. Ireland were judged to be providing illegal state aid. You might not like anti-trust laws but most places have them in some form or another, US included. They should probably be invoked rather more than they are.

I don't see how any of that relates to the startup scene. European VC isn't the same as SV. Europe has multiple countries and languages so is far harder to grow with the ease you might in the US.

I’m sure the startup scene would be much more vibrant in a world dominated by Microsoft which considered Linux a cancer and tried its hardest to have its use made illegal.

This time is over. Windows comes literally with Ubuntu nowadays via Bash for Windows.

I'm not sure why you failed to get the parent's point but here it is again: Windows comes with Ubuntu today because it's no longer a monopoly, which was in a large part enabled by the various anti-trust decisions against it.

Had Microsoft not been punished, there would likely be no Ubuntu.

This is happening again with Google & Android which have extinguished all mobile OSes except iOS. Names and times change, but the behaviour stays the same.

Welcome to the real world.

This sort of gov't/regulatory actions, or bias, against foreign companies is nothing new and manifest in different shapes and colors. Do you remember when the Obama administration reversed a foreign company's win (Samsung) at ITC against a domestic company (Apple) in the name of "public interest." I fully supported Obama's decision to do so to protect domestic companies against foreign ones. The EU likewise has every right to trouble anyone who doesn't comply with their rules or suck up to their liking.

Now in all seriousness, I don't think there are too many direct competitors to Google in EU who would benefit from this "protectionism." Except for maybe Opera? Like others have pointed out, most of these anti-trust investigation are instigated by their competitors, not by zealous nationalists or protectionists.

> fined a record €2.4 billion ($2.7 billion) for using its search engine to steer internet users towards its own shopping platform

The EU is totally bonkers!!! And these fines are largely uncalled for. It's their site; why shouldn't a business up-sell to their customers? I know plenty of people who do it all the time. That's part of the point of being in business. If a user doesn't want to buy from Google, simply don't click the buy button.

I think it's called abuse of a dominant position, considering that Google has a quasi-monopoly in search engine in Europe.

I don't think there's anything wrong with a monopoly that isn't state enforced. Their IP, their servers, why shouldn't they enjoy a monopoly? Absolutely nothing wrong with that.

It is when you involve the state in creating a monopoly that you have problems. Consumers continue to patronize a business to the point of it being a monopoly because it serves them well. In a free market environment, this cannot be a bad thing.

Why shouldn't they? Because it harms competition and because Google is a near-monopoly. That situation gives Google the power to kill competitors, and that's bad for everyone except Google.

See my response here: https://news.ycombinator.com/item?id=17608171

Christ, this topic is rife with misinformation.

Google search is the door to the internet for a majority of the world population. And then they had the brilliant idea to give their own services prime real estate on this door, thereby completely screwing alternative providers out of the traffic.

Its not about upselling. It is about Google leveraging their effective monopoly as a search engine (in EU, >60%) to unfair advantage in other industries (retail). MS got into same trouble over IE in US as well.

What a company is actually doing it not "that" relevant in that case.

Is it much more related to the fact they already have a quasi monopoly on one domain, and they leverage it to acquire more power or market share in another area.

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