Why wouldn't Silicon Valley be affected by this? Most companies have european customers.
But the EU, as a whole, is the world's biggest market and it is a common market in spite of legal and cultural differences between countries. So that's pretty naive.
And if companies think the "compliance cost" is too big, that's fine, it means they are leaving money on the table for their competition to pick up. The best outcome is actually the EU getting some real alternatives to US services that are deemed to be indispensable.
So personally, as an EU citizen, for companies no longer wanting to serve EU citizens, all I can say is don't let the door hit you on your way out.
Although I generally prefer the Dutch set of laws to the American, Dutch laws stifle innovation. The difference in even simple things like setting up a business, hiring an employee, and ensuring compliance with local laws is insane.
Every time I go to America I get requests for random things that either don't exist in the Netherlands or are criminally expensive. Bengay cream here costs €16.20 for 57g, only available at special online shops. In America you can buy it everywhere, €5.84 for 113g. That's one example. You might criticize it for being too arcane, but there are hundreds of thousands. Each one of these things costs double the Amazon price or more for popular products: RAM, angle steel, many batteries, sanding belts, IEMs, pumps, permethrin, LEDs. That's just off the top of my head. Every time I need something it's a game: will I get lucky and pay 40% extra, or will it be only available for 200% the price? Or even worse, not available at all?
You want to sell those things above? Go ahead. A few of them are even triple (!!!) the American retail price, so you'll make bank, right? Start a business. But you won't, and nobody else will, because it's tremendously difficult to start a business here.
I can understand higher taxes make products more expensive - sure. Those taxes provide the benefits I enjoy in a country like the Netherlands. I can even deal with the cost of shipping from America. But I cannot deal with paying double or triple the cost for hundreds of thousands of various products. And laws like this just continue the movement in the wrong direction.
Seems like a bit of a straw-man argument anyway. Businesses don't usually pay consumer-oriented taxes like VAT (UK), or Mehrwertsteuer (DE). So which taxes are we talking about exactly?
And importing stuff isn't too hard. If it was a truly Dutch issue, you'd set up the import business in another EU country, and then ship it to the Netherlands once it's inside the Union.
I'll give you aerosol deodorant, but I think that comes down to a preference for stick deodorant in America - which costs approximately as much as British aerosol deodorant.
That's one product; I named ten, and I can provide plenty more. The fundamental problem of not having access to many products for a reasonable price is a big one, and unfortunately I think Europeans just accept it.
Look, I'm pro EU, and I'm not protesting the taxes we pay in the Netherlands. I think they go to a good cause, and I don't think high taxes make it impossible to start a business. But onerous regulations do. Shit like this just adds to the pile of things that a startup has to deal with, and eventually it's too much.
I'm not saying that higher regulations are just a Dutch issue, by the way. I think it's a general European issue. I just picked the Netherlands because I live here and have personal experience with startups here (as well as in Germany.)
I generally like the GDPR, but many details of it were moronic. I've visited hundreds of sites where you have to individually deselect each of hundreds of trackers. Is that legal? Nobody knows! The GDPR is a nightmare for startups: you've got tens of contradictory blog posts from legal experts saying different things, 28 individual country regulators involved... Even if your startup is very privacy-friendly, you still (probably - nobody knows for sure!) have to put up one of those ugly big GDPR-walls to every EU visitor, which messes up your user experience and turns people away.
Is there not a Dutch version of the same compound, manufacturered closer to home?
There are several methyl salicylate products available in the Netherlands, but they all are available for a similar i.e. extortionate price.
In a country with easier to navigate laws, you can start an import business and sell the products locally. Sure, there is a price increase due to VAT, shipping, handling and business expenses, but this is typically reasonable. For an example of a low-volume perishable food product, I'll take stroopwafels. Here in the Netherlands, where they are made, a 200 gram bag costs between €1.50 and €2.40 depending on the brand. In America, the same 200g bag costs €2.40 at Trader Joes (which is $2.79.)
That's between a 0-60% price increase - and that's for a perishable, low-volume, inexpensive food product sold in a luxury grocery store.
https://www.boots.com/boots-muscle-pain-relief-cream-35g-101...
That said, I do find the UK to be substantially better than the Netherlands for buying a lot of things, despite being only about a hundred miles away. I wish there was an easy way to get products from the UK to the Netherlands - that would make a lot of things easier. There's stuff like Borderlinx but the prices are very high for such a short distance.
I wouldn’t say that’s very difficult.
I've been involved with many startups on both sides of the ocean. In America (for better or worse) you get up and go. In Europe, simple things like creating a contract and paying someone are way more difficult and the barriers are much higher. Everything from the address you register your business at to protecting yourself legally is an issue.
Thankfully, the EU puts workers' welfare above a single person's idea(no matter how excellent somebody might think their idea is).
> Setting up a business also involves compliance with every law related to your business,
??? That's a bad thing? I'm delighted that businesses have to comply with minimum standards before they can trade.
My point is this: The EU has a ridiculous amount of bullshit laws, like this one, that make it harder to be a startup. These laws do not benefit the consumer at all.
It's idiotic arguments like yours - where people automatically assume hurting businesses is being pro-consumer - that has got us to the current stifling regulatory climate.
Furthermore, it's a death by a thousand cuts scenario. It's not as if the Kill All Startups Act of 2009 is the one thing crushing European innovation, and by repealing that bill we solve all problems. Everything from transferring shares in a company to complying with GDPR to the address you register your business at to how to protect yourself legally is difficult here.
For many laws involved, I like the law but dislike parts of the implementation. For example GDPR. Given the choice between GDPR and no GDPR I'd prefer to have the GDPR. But there are a lot of issues in the implementation. There's entirely contradictory advice on the Internet from trustworthy sources on what is and isn't compliant. A number of lawyers suggest the use of arcane popups where you have to manually deselect each of hundreds of individual trackers. This strategy is used on a large number of websites now, including many popular ones. Is this compliant? Nobody knows! Even after spending many hours researching the GDPR and carefully crafting a plan based on advice from trusted lawyers you still might open yourself up to massive liability. The LOW tier of fines is _the higher of_ €20 million or 2% of your annual turnover. By making a simple one-person website I suddenly expose myself to a minimum of €20 million in liability! Now, is that fine likely if you make a good faith effort? No, but it is possible!
Here's an example of my mental calculations for starting a small website, based in the Netherlands vs. the US.
Netherlands: Hmm, I want to start a small website to sell widgets. First, I've got to form the company. Ah, shame, I'm not legally able to register the company at the address I live at. I've got to rent a shell office. Ok, time to go to a sketchy company and pay them €1200 per year to use their mailbox. I start to set up a website; I have to hire a lawyer to interpret many of the complex and interplaying laws around websites, widget selling, and small businesses in the EU and the Netherlands. After spending thousands, I'm ready to set up the site. I build my company, but it is an expensive process as many things I need cost far more than they would in America. Everything from pens to keyboards to hard drives is substantially more expensive. The site is now running, after spending a very large amount of money. I hire someone. They seem motivated and start working hard. Unfortunately, their output slows. My business is choking. I can't afford an unproductive employee. Dutch law means I can't fire the employee without their permission. I've got to take them to court or a public authority. I hire a lawyer again, and prepare the case. I show clear evidence that their firing would be justified. The employee resists, however, drawing out the proceedings. My bank balance nears zero. After a long and hard battle I win; the UWV decides that their firing is justified. As part of the "win", however, I must still compensate the employee many thousands of euros of salary, keep them employed until a set time, and pay myriad other costs. This drives me deep into bankruptcy. Because I am a small business, I am also declared personally bankrupt, and my assets are seized.
America: I want to make a small website to sell widgets. Wow, I get free grants from the government to encourage small businesses, nice! I set up the site and buy some widgets. I hire a local lawyer to ask about any relevant laws I've got to comply with. We sit down and for an hour of his time I now feel that I am sufficiently legally protected, and sleep easy. A few weeks later I get invitations to participate in the local business community. Wow, I'm invited to dinner with the governor of the state! My business expands and I hire someone to start shipping widgets. They work great for a few weeks, but then they stop working as quickly. My business struggles. After giving them some time to improve, their output is still low and I fire them. I hire another employee, and my business grows again; eventually, I retire on a yacht.
I have no clue what you are talking about with those products though; that's the case in many countries. In the south of Spain I pay more for a fridge or a bath than if I import them from the Netherlands. NL is an expensive country for some things. In the US you can get Bengay cream (i have no idea what that is by the way) for 5.84 but university and healthcare can bankrupt you. Give me NL every day as long as that lasts; these consumer products are not fundamentals while education and healthcare are imho.
I specifically said that I prefer the Dutch way in general, and that I don't mind paying higher taxes to support this. Hell, I live here, I hold a Dutch passport, and I vote for the related causes.
However, what I hate is certain aspects of the regulatory environment that choke out startups. That has nothing to do with healthcare or education but rather to do with very restrictive EU + Dutch laws.
Making it difficult to start a business makes the incumbents more powerful, and the incumbents already have high prices and limited selection here in the Netherlands.
[partially copied from a comment of mine below]
Starting a company here in the Netherlands is quite difficult. It involves compliance with every law related to your business, hiring employees, purchasing services for the business, etc etc. All of these things are more onerous, expensive and difficult here.
I've been involved with many startups on both sides of the ocean. In America (for better or worse) you get up and go. In Europe, simple things like creating a contract and paying someone are way more difficult and the barriers are much higher. Everything from the address you register your business at to protecting yourself legally is an issue.
It's difficult to explain exactly how debilitating the regulatory environment is to someone who hasn't experienced it firsthand. Startups are fragile. Many companies that are now unicorns were at some point on the brink of collapse for a good bit of their early life. Just one trigger can kill a startup, and additional regulations can be that trigger.
Sure, there are other things crippling innovation in Europe: a total lack of venture capital and fewer "temporarily embarrassed millionaires" play a big part.
And yes, some parts of starting companies can be hard, thats what you have an accountant for who does that. Doing it yourself is madness in most/all of Europe I think. Might be easier in the US but I do think many of these think help rather that stifle (I like that you cannot hire/fire people on a whim for instance), however I agree it usually goes too far. And in that regard NL is still one of the easiest; ES, FR, DE are all far worse. Bureaucracy went a few levels beyond there.
I too had companies in a bunch countries, but not the US, and found Spain the hardest and the UK the easiest. HK in between. But after you opened a company and have the employees, I prefer the Netherlands. The tax actually seem to be willing to help you (had many company tax audits over the past 25 years in different countries and different companies and the NL ones seem to be by far the most relaxed).
But sorry for the misunderstanding (still think the product rant was a bit off on this topic as it probably is really not related), and I agree with you. But what is the solution. I would hate to see the NL/EU turn into the US (as it is now) and most of the fixes that countries try are incentives that usually make the rich richer, get companies in power etc. The end game there is bad for humanity in my opinion. But maybe you have actual solutions in mind without (those) sideeffects. In which case; ga in de politiek alsjeblieft!
What metric are you using because the EUs GDP is about 700 billion less than the US and going to drop even more when the UK leaves.
US GDP: http://www.imf.org/external/pubs/ft/weo/2018/01/weodata/weor...
EU GDP: http://www.imf.org/external/pubs/ft/weo/2018/01/weodata/weor...
Except it isn't really a single market. Each country has a unique language, culture and body of law. The cost of taking a German product to France is much higher than expanding from California to Texas and New York. (California, Texas and New York having a higher combined GDP than France and Germany [1].)
[1] https://en.wikipedia.org/wiki/Comparison_between_U.S._states...
I agree with the basic concept of GDPR, but the uncertainty around it, the seemingly unclear nature of what exactly it means, and the fact that it will be enforced by each individual EU member potentially differently, all adds up. It's just not worth it.
This just adds to the pile, in a BIG way
https://www.nytimes.com/2018/08/22/technology/google-china-c...
It seems likely that large internet businesses will probably pay to comply with GDPR.
Many small businesses, whose customers are often mostly regional anyhow, may decide that it's just not worth the cost of compliance.
You cannot not comply with it though.
Why is that? One of the big reasons people and companies comply with the law is that they don't want to suffer the consequences of non-compliance.
If a company has no assets, customers or business relationships in Europe, what is a GDPR judgement against them going to do?
Customers don't have to be in Europe, it applies to european citizens living in your country.
I mean, this should be utterly obvious given that most Westerners are not complying either laws around the world constantly. We can and do criticize the leadership and governments of any and every country as is our right in ways that are absolutely illegal according to those countries, just for one simple example. The EU is free to get some help from China and make a Great Firewall of their own and censor the net, but if an American blows off something of theirs that is legal in the US and they come demanding the US enforce their law they will get told to pound sand. I mean, this isn't even just normal discretion, in some cases Congress has even flat out made it illegal for the US to honor foreign judgements, such as the 2010 SPEECH Act which rendered all foreign libel judgements unenforceable, unless it's a country that has a direct equivalent to the First Amendment of equal enforcement (I'm aware of zero countries in the world where this is the case) or the defendant would be liable if tried in the US, which in practice means basically any enforcement faces a near insurmountable bar.
Calm the fuck down.
GDPR is a process, it's about pushing companies to good practices through compliance. A lot of it makes sense, for example, making sure your staff understand basic IT security practices, which is no different to health and safety.