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Comment by maeln | Hacker News Reader

Thats not really it. US company (Apple, Google, Amazon, ...) understood the EU more than anybody an exploited every flaw they could find to pay as less tax as possible.

The "magic fine" were not random and unjustified. Those country were already borderline, if not fully crossing the border, with a lot of regulation here. Country like France and Germany were sick of seeing a lot of profit made within their border while tax revenue flee elsewhere.

The fine they given were not from vague plan, they were within the strict boundary of the law that those company keep playing with. Those same company are pushing for stricter and clearer regulation but are being faced with the opposition of other EU member who kind of profit from the practice of these company.

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I meant to say company were borderline instead of country.

Let's see what happens when FAANG pull the plug in France. I can guarantee you the public will remove whoever was in power and it would be back to the status quo.

It doesn’t seem to me FAANG want to see what happens if they do that.

I think what you'd see is a fair number of members in the EU block take similar action, daring Amazon to do the same to them. The truth is, Amazon couldn't, in the long term, afford that: Oh sure, they could stand to lose the revenue by itself, but that's just a first-order effect.

A second order effect would be the rise of a regional competitor to fill the vacuum. Then Amazon, even if they played nice, would have a hard time pushing back in to those markets, at the same time the regional competitor would, if wise, get on good terms with the EU regulatory regime and thereby give it some preferential treatment when trying to get into markets that Amazon had not vacated. A regional competitor could easily hit a tipping point and become an international one.

That’s why Amazon does it just for a few days.

Long enough for the government and the people to feel the shock, but not long enough for a serious competitor to take advantage of.

>A second order effect would be the rise of a regional competitor to fill the vacuum.

No, it wouldn't. Amazon in the US is amazing compared to what Amazon is in Europe. Packages take a lot longer to arrive and the choice is much worse. There isn't even a central Amazon EU website! Yet no competitors exist. Absolutely nothing is even close to Amazon. For whatever reason, the EU market is incredibly behind in these kinds of services.

I'm not sure you are as familiar with the online marketplaces in Europe as you claim to be. Amazon set up separate national operations in the EU due to social, regulatory and tax reasons. Also digital e-commerce retailers are prevalent in all EU countries. Amazon is only one of many players.

In fact, logistics over here is much better developed than the US. Most items can be next day delivered here in the UK for a low standard charge. Amazon has to offer same-day deliveries to the UK at a much higher level than the US in order to compete and maintain its competitive advantage.

>Most items can be next day delivered here in the UK for a low standard charge.

Cool. What about the rest of Europe/the EU? I am in an EU country and ordering anything from any of the Amazons has a minimum delivery time of 1 week. Usually it's longer than that.

>Also digital e-commerce retailers are prevalent in all EU countries.

And they are not trustworthy. Those online retailers always have everything in stock, but after you order and pay money it always turns out that they will have to order it from somewhere else. Often that other place has no stock either. It took me almost a month to get a new HDD last year because of shenanigans like this.

>Amazon set up separate national operations in the EU due to social, regulatory and tax reasons.

This is true if you live in one of the five odd countries that have an Amazon site. The 20 other EU countries don't get this luxury.

What are you actually arguing about? Because in your original post you seem to be arguing that Amazon here in Europe is heads and shoulders above the competition while still being inferior to the US, implying that the e-commerce landscape here is dire.

My comment disagrees with that. To me, it's the other way around, Amazon has to do more than what they do in the US to compete over here.

So when I'm talking about getting relatively cheap next day delivery here, I'm talking about with any merchant, not just Amazon. That's why they have to offer more same-day delivery (than the US) to compete (and to justify the Prime subscription).

>What are you actually arguing about? Because in your original post you seem to be arguing that Amazon here in Europe is heads and shoulders above the competition while still being inferior to the US, implying that the e-commerce landscape here is dire.

I'm arguing exactly about this. Yes, Amazon's doing great in the UK, but Europe does not stop at the border of the UK, France, and Germany. There are other countries there. I live in one. I explained that it's not rosy across Europe.

>So when I'm talking about getting relatively cheap next day delivery here, I'm talking about with any merchant, not just Amazon.

Great. Now what about the other few dozen European countries?

>No, it wouldn't. Amazon in the US is amazing compared to what Amazon is in Europe.

So your argument boils down to "Amazon is bad in europe, therefore no competition would arise even without Amazon"

That doesn't quite follow.

Are you saying that Amazon is the best that is possible in Europe? Even if that were the case, there's no reason an equally bad competitor couldn't fill the vacuum.

Even if I'm wrong, my point against the GGGP post stands: There wouldn't be some huge public uprising against local governments to get Amazon back if they decided to pull out.

>Are you saying that Amazon is the best that is possible in Europe? Even if that were the case, there's no reason an equally bad competitor couldn't fill the vacuum.

No, I'm not saying that a competitor can't appear, I'm saying that it's unlikely, because it hasn't happened for such a long time. Of course there are other ecommerce stores but they aren't on Amazon's level.

I also agree that people wouldn't care much about it if Amazon pulled out. It would just be another way where Europe accepts worse service though. France still uses cheques to pay for some utilities (or at least they did only a few years ago).

I would take the other side of your bet in a heartbeat. There is no love for FAANG in France, especially when they are paying fewer taxes than local businesses.

The respectful admiration that people have in the US for big businesses and successful entrepreneurs doe not exist in France. Instead, there is the same feeling for the rebellious, for the one the fighting against big businesses, for the people.

People love 2 day delivery and easy returns. I'd like to see a company in France do this in a short time. Not with the 9 to 4 working hours France wants.

Is your argument that, say, Google, expected fines reaching into billions of dollars, but understood that they would end up with cash in their pocket by heavily avoiding taxes and just paying the fine?

That seems like a risky game to play, because you don't know if the fines are going to be $1B or something more important like $100B or something.

That is pretty much the game Google and co played at least more than one or two times.

Last pre-COVID19 example was probably Facebook trying to circumvent the idea behind GDPR by claiming their user use facebook because the _want_ advertisements and _the only way_ to provide customized advertisements is by thoroughly tracking everything the user does and therefore the they don't need any additional opt. in/out from the user. Which is both pretty much not quite true.

(In GDPR there is a clause that e.g. if you sign a contract they contract doesn't need to state that the contract will store your name provided through the required name field and similar, you still need permission if you use the name for anything but "the contract", like e.g. statistics).

Yes, this is precisely what companies gamble on.

Take a look at the Double Irish [0] and then at the Dutch Sandwich. [1]

These are accounting methods the deliberately take advantage of loops holes and arbitraging of tax regulations between jurisdictions, knowing full well some jurisdictions will take issue with it and it will be a fight.

[0] https://en.wikipedia.org/wiki/Double_Irish_arrangement

[1] https://en.wikipedia.org/wiki/Dutch_Sandwich

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