Big tech face EU blow in national data watchdogs ruling
reuters.com
reuters.com
Ban Oracle and Microsoft from public procurement and start supporting the European equivalent of Baidu or Yandex. With ARM (prior to the acquisition), Linux, MariaDB, etc. - Europe was in a great position to do this.
We need to stop this digital colonialism where massive, monopolistic US corporations pay no taxes in Europe, and then take all the profits back to the US where they pay 3x the salaries - only supporting the US economy.
Why do you make it sound like they don't? The EU invests massive amounts in technology (in regards to its paltry investment budget, but that's another debate).
One does not prevent the other. And calling regulations against clear abuse "endless bureaucracy" is insidious at best.
There is a huge amount of money available, but it's locked behind layers and layers of bureaucracy. It is a huge waste of time on both sides, for some anecdotal I'm procrastinating from an application as I type. I should be coding or doing something otherwise useful.
The situation has devolved to where startups treat public funding as though it were revenue and have dedicated teams to chase it.
The Economist had an article here a few days ago lamenting that Europe fails to produce IPOs, which is where the actual problem lies. If ExpectedValue[European Startup] = ExpectedValue[Startup] | No IPO, then it's no wonder European startups are valued at 10% of their US counterparts.
The EU needs to get out of the way and end its Lots of Little Winners policy, because without winners you just wind up with Lots of Little Losers in a globalised economy.
I'm happy that the EU still bets on the small guys.
A lot of European startups don't get to the size where an IPO exit would be appropriate because a US company buys them before that can happen.
In a unicorn situation, the founder will generally take money off the table early and will be okay regardless. Just look at WeWork.
And we’ll they actually cannot pay what they promised, so they keep upping the pension age etc.
Shouldn't the goal be producing tech that's beneficial?
This is how it works in America, too. Professional grant writers who know how to get funding are basically the rainmakers for research teams.
An interesting question is: what's the ROI of this investment. Anecdotally, the over the last 50 years the EU has been loosing their leadership in field after field. First to the US, then Japan, S Korea, Taiwan, now China. With the loss of the UK Arm is no longer an EU company. Have you looked into Linux commits recently [1], or where papers come from in the top CS conferences?
Here's the relevant Wikipedia article: https://en.wikipedia.org/wiki/Arm_Ltd.#Changes_of_ownership
Well, GP wrote "endless bureaucracy" not "endless democracy", unless the comment has been edited.
And that, IMNSHO as someone who has founded tech businesses here, is entirely fair criticism. The environment created by all those regulations is insanely hostile to tech entrepreneurship, and it's not as if many of those regulations are well considered or effective at protecting vulnerable groups anyway.
The worst part is, I'm not convinced anyone deep inside the EU corridors of power even realises this is what they are doing. If the first step in solving a problem is understanding that it exists, the EU is still at step 0.
yup.
Many different rules in eu countries, fscked up tax rules for companies trading with foreing customers, high taxes for relatively well paid tech workers, and high cost of entry into the business is killing european businesses.
Even starting a business is hard... I hear a lot of people from USA who (eg.) find a old t-shirt printing press in a yard sale, and start their own t-shirt printing business, fill out some forms, sell 7 tshirts in two years, mostly to family, and then stop doing it. Just being able to letally sell a t-shirt in many eu states will cost you thousands and thousands of euros, where it's just not worth it to start. Wanna make an app by yourself and host the backend on a $5 digitalocean VM? Sure... but do it for free. Want to earn something? If you have just a few dollars of income, it's not worth it... you need a lot of users paying you a lot of money to pay the government fees, even if you work for free.
There is no reason that a small team of founders or even a solo founder should not be able to start and grow a tech/software business well. The natural barriers to entry are very low in this industry. If you have a useful idea, the technical skills to implement it, and the willingness to try, you should never need lots of external help to build a viable business.
Obviously there are advantages to taking substantial external investment or other funding, and doing so usually also comes with strings attached. You have to weigh up whether the cost/benefit is favourable. But in a tech/software business, this should primarily be useful for accelerating the success of a business already destined to be successful. We're not talking about manufacturing where you need to pay for factory facilities and supply chains of physical materials and other big up-front costs before you can start creating value yourself that you can charge for.
The reason it is increasingly difficult for any small founding team to actually do that in much of Europe has a lot more to do with regulatory barriers and red tape than lack of funding. No startup is going to perform well if someone keeps distracting the people building it and making them do things that aren't directly adding value.
There is a lot of bs thrown around e.g. GDPR is far from evil or bothersome, as well funded lobby groups have made it out to be. You don't need cookie warnings if you use cookies to log your users in, only if you sell your users out to google and other analytics companies. You are obliged to have unsubscribe links in your emails to users. You have to provide and delete data you hold on specific users if requested. From a few hundred thousand users you need a data controller which is for ally responsible to watch out for data breaches (this is just an identified person, not a full time post). What's the big deal?
Much more stifling are e.g. the processes to register a company in the country you are based in or to get a bank account, and of course Europe's language diversity shrinks the potential reach so most that want to scale do so in English and then find it convenient to have offices e.g. in the US or UK.
While this is not intended as a criticism of you personally, you have ironically just demonstrated a big part of the problem. I might reply that I have seen this response a lot, no matter how often I have previously given detailed examples, sometimes even in the same forum. A lot of people who haven't themselves tried to run a business in this environment are almost completely unaware of the hassle it can be. Here in the UK, this is a particularly poignant issue because of the poor quality of "debate" around Brexit a few years ago.
Now, to answer your question, here are a few of the different barriers a new tech business would face here in the UK right now.
1. It's been difficult-to-impossible to open a new business bank account for the past several months. The big banks have (they claim) been so busy administering government support schemes for existing business customers that they couldn't take on any more. Government have been mostly ineffective at dealing with this problem.
2. To hire anyone (other than owner-directors, when some of this might not apply) means drawing up employment contracts with all the required elements, establishing formal grievance and disciplinary processes, being aware of numerous employment regulations, arranging all required insurance policies, identifying what evidence you need to keep to confirm a candidate's legal right to work for you, understanding any relevant minimum wages and time off including many kinds of statutory leave and pay, understanding your health and safety obligations including things you must say/provide/fund for your employee, establishing a payroll system and integrating that with the government's real-time information system if you haven't already done this, setting up a compliant company pension scheme if you haven't already done this, and who knows what else because this sentence is already half a screen long.
3. All of your personal data processing needs to be GDPR compliant. Its defenders like to say this isn't a big burden because it "just" means you have to do a few reasonable-looking things they can type out in a single comment. However, the main GDPR document alone is nearly 100 pages long and that's before you consider all the supporting material and the views of 28 different regulators. One of these things is not the same scale as the other.
4. If you're selling B2C, the consumer rights rules will apply. Again, on the face of it, that's fine. Who can object to fair protections for consumers, right? But when you actually read them, they are full of things that aren't well considered, like defaults that probably no-one would ever want, long and highly context-sensitive lists of information that must be provided at different times, obscenely disproportionate penalties for minor infractions by merchants, etc.
5. VAT. I'm not going to elaborate much, though I could write a pretty long book on the subject at this point. You're welcome to Google the numerous extensive criticisms out there. I suggest starting with #vatmess. Pay particular attention to how the EU changed the rules so what used to be a single market where merchants treated customers anywhere in Europe the same as in their home country got turned into a situation where merchants had to understand and comply with the tax rates and rules in every one of 28 member states. This is literally the opposite of the EU promise of creating a single market.
6. The IP landscape is unclear. Attempts to standardise it have repeatedly failed. No-one really knows what you can or can't get a patent for, or even what types of inventions you can or can't get a patent for. Copyright rules differ significantly with geographical location, and in some places additional related rights exist.
7. Lots of relatively minor stuff like the "cookie law", which is a tiny and yet totemic issue. It was well-intentioned but written by people who didn't really understand the technology and its implications. It doesn't do much to protect anyone. It annoys almost everyone. Non-compliance is widespread, whether deliberately or through simple misunderstanding or ignorance of what is technically required. There is little enforcement in practice, so operators who do make the effort to comply are left at a disadvantage. And years later, all of this still hasn't been properly fixed even though just about everyone agrees on it.
Edit to add:
8. How could I forget PSD2/SCA? There's nothing like putting obstacles in the way of actually collecting money from your customers to help a business grow.
In the US there are multiple turnkey schemes for #2, though, albeit at some cost. Is there a gap in the EU?
You can certainly get software that handles things like payroll and statutory leave. Using it has become a practical necessity anyway since governments like the UK's started requiring payroll data to be filed electronically using approved software built on top of their API.
IMHO, the problem with becoming an employer for the first time is that there are so many things that an employer is now required to arrange that even if they are individually quite reasonable the cumulative effort can be a deterrent.
For example, if an employee at your tech firm uses a display screen, you must arrange and pay for an eyesight test with a suitably qualified professional if they ask for one. You must also pay for their glasses if they need an extra prescription specifically for display screen use, but you don't need to do this if their ordinary prescription is already suitable.
While you're dealing with H&S issues, don't forget to conduct your suitable and sufficient risk assessment for each new employee who is going to be working from home during the pandemic restrictions and then make any changes needed so they can do so in a safe and healthy way, whatever any of that actually means in practice.
The list of things you're automatically responsible for the moment you become someone's employer is pretty long in my country, and if you want to get it even close to right you'll probably end up dealing with lawyers, accountants, insurers, pension providers, HMRC, anyone who makes related software you now need to use, and from time to time possibly others like medical professionals.
As far as I'm aware, the closest thing to a turnkey solution that covers all of this is engaging an HR professional, presumably on a consultancy basis since you hardly need one full time if you're a bootstrapped startup looking for employee #1. But then that's more cost to deal with, and it's still going to take considerable time for one or more of your founders to make all the necessary arrangements even if you've brought in an expert to tell you what those arrangements need to be.
Now combine this with self funded companies, and 1 bad hire can kill your company
It's insidious, yes, but also what if foreign competitors gain a competitive advantage due to fewer regulations?
They will still need to follow EU regulations, but they gain R&D momentum locally.
The only solution I see is to bar foreign companies that do not adopt EU regulations locally too - e.g. a self-driving car developer that does not need to follow safety regulation as strictly locally.
This is about 27 separate national governments to apply separate regulatory procedures, rather than just having Ireland's current gdpr enforcement. That's not necessarily bad, but it is more bureaucracy.
The problem is that the EU invests. Small businesses are taxed to death and swamped with bureaucracy. From that you can clearly see where this is going.
No, I can't see how taxes are to blame. Taxes are not signficant concern for most startups.
The bigger issue is that the US has a massive advantage, in that a US tech company can launch in one language (their native language) to 300+ million potential customers, and hire from the same pool with minimal bureaucracy (the laws are largely the same, and at least written in the same language, ID and visa requirements are the same, payment providers are mostly the same, etc.)
In Europe on the other hand, to launch even to other countries in the EU involves a lot of translation work. Then taxation varies a lot, and the laws are in different languages so you'll need local lawyers and a local tax office to hire employees there, etc. - on the employee side, the ID and visa requirements vary a lot too, so you'll need local specialists / relocation companies to help with that. The payment providers also differ a lot, e.g. with Sofort-überweisung in Germany and the lack of online card payment options there (until recently), etc.
And then there's the extra EU regulations - the GDPR, cookie consent laws, age verification laws for video content, link tax for aggregation services, etc.
But I still think the best solution in the short-term is protectionism. Give European companies a bigger advantage in Europe by not sourcing from foreign corporations (especially for critical infrastructure like public services), and invest in FOSS and development companies around that (where smaller companies could work together on FOSS projects).
Otherwise the US companies just dominate, and then use their dominant position to get a monopoly through bribes and threats (see Microsoft in Hungary and Munich for example). Then they pay no taxes in the EU, take all the profit back to the US and use that to crush EU industry even further - just like how in the past natural resources were plundered from colonies, but all the skilled industry was kept in the coloniser countries.
https://www.gov.uk/government/publications/open-standards-fo...
That's the UK govt standard for document/data exchange. Short, simple and open. Get the basics right first then tackle the complicated stuff.
Which would be great if they actually followed their guidance.
In reality, the UK Westminster government is one of the worst entities for pushing out spreadsheets that use over-engineered excel-specific validation (often wrong for excel, too) with protection. There is no offer of an ods version, only xlsx.
Their power is to make rules, so they will make rules because it is all they know how to do. Leaving things alone is often the most difficult (and important) thing to do.
I'm not sure that criticism is entirely valid, as it looks at European institutions exclusively. Surely lobby groups and their perpetual pressure on legislators play a role, too, like they would for the US House and Senate. Even with that pressure, I suppose they could "leave well alone", but then they'd be seen as uncooperative and ignoring their constituents.
I'd like to live in a world where legislators have competent cabinets and can be assumed to be reasonably well-informed, but for instance the Facebook hearings have shown there's a long way to go.
Even non-technical issues show this to be true. Case in point: the UK and Dutch governments thinking they would solve the housing crisis by giving mortgage grants to starters. Expectation: case closed. Reality: housing prices surged even more due to the cash injection.
The Sackler family and Purdue Pharma is a more accurate association. They purport to help and in some situation they do. We all love cat videos and notes from mom and dad. But they make money from addicting people. Whatever technologies they create serve that mission. They're not opposed to improving the quality of users' lives, but that's a side effect. Mostly they relieve craving in ways that recreate it.
What the EU should do is play to it's strengths as the last organizations left that takes the regulative role required by smiths model of capitalism serious and start enforcing transparency, choice and interoperability on the digital field, with the same zeal it treats similar regulation in the agricultural and manufacturing sectors.
Just ban the practices they follow, which makes them unqualified to participate unless they really change that.
For example, public procurement should always require software be open source as a hard dealbraker. This is actually the case in [too few] countries.
Some things can be open source, the government already uses a lot of open source in many countries, but the government has little recourse if providers of critical software capabilities refuse to do business under those terms.
And now there is a closed source competitor with a lot of backing from some politicians. So it's not that they would have learned the lesson.
Neither of those are EU either, are they? Baidu is Chinese and Yandex is Russia (admittedly they are in Europe, but not part of the EU). How is that any different, from the EU's perspective, to supporting Oracle and Microsoft? Unless I'm misinformed, which is entirely possible.
Curious as to how one expects to will such a company into existence, but whatever I guess.
America, Russia and China are heading head first into cyberpunk dystopia and your suggestion is we better hurry up because we're currently being stopped by 'endless bureaucracy'? I'm gonna be honest I'd rather take the bureaucracy than play that game
How about doing both the first while also ensuring that european law is actually being followed? So far US monopolists have relied on being in bed with Irish lawmakers to avoid the GDPR fines.
What do you mean by "endless bureaucracy"? Making sure that people's personal data is not sold right and left?
Its not that they haven't poured in huge amounts of cash into science and tech. Its that its all gone into building ivory towers even more disconnected from reality. So the people in those ivory towers have no clue how to compete in a ruthless world.
When someone just gets cash grants without loosing sweet and blood how the fuck are they supposed to compete with people around the world who have that experience?
SpaceX does gov contracts for US defense and NASA.
Tesla is selling their carbon credits to other companies.
NASA is gov agency.
Boeing is doing both defense and civilian contracts for US gov.
Somehow, "market forces" (in a certain not-literal sense) where supposed to take care of this. In an honest marketplace there exists a level of competition which keeps the participants honest.
Back when knowledge still needed a physical merchandise-like form to be transferred (even as printed books) this market-given-honesty pattern still somewhat worked. But the modern digital age has completely broken this.
There's just something fundamentally different about "cognitive commodities" (i.e. digital data) and "merchandise" (i.e. goods with physical exclusiveness) which completely changes things
The A220, a legitimate clean-sheet and fantastic aircraft, came from Bombardier and only fell into Airbus hands due to regulatory warfare, albeit from the American side this time.
From the financial rent seeking of London, to the tax and privacy regulatory arbitrages of Ireland the same pattern of exploiting arbitrarily erected information walls to evade scrutiny and accountability.
Of course this is a tango that takes three to dance...
It is amazing to see how Brits outside of (hell, even in) London live, the British countryside has some of the poorest areas in western Europe. Evidence marketing is effective!
All rich countries have impovrished areas that have been left behind.
> It is amazing to see how Brits outside of (hell, even in) London live,
The same can be said for California, New York, Florida, Dublin, Paris, Barcelona, etc.
Check which countries make the top 10 lists in QoL. You'll find their ghetto's are as nice to live as some of Britain's good neighbourhoods!
Anecdotally, the stereotypical British farmer is a wealthy Tory, and low income populations are concentrated in council estates in postindustrial northern towns and cities (i.e. not the countryside).
The Welsh Valleys too since the loss of the mines.
As for post industrial rust-towns, I think of the northeast/Newcastle, Humberside & Scotland --maybe influenced by 'The Post War Dream' and Kris Killip's photography.
Not quite: https://en.m.wikipedia.org/wiki/London_fiscal_balance
They’re just better at keeping under the radar and probably have better PR.
They're running the dog and pony show.
Ireland is an outlier in the fact that her ascendancy coincided with the US tech boom and language was an advantage. You have a very awkward situation developing and the current political leaders don't have the imagination to get out of it.
The UK is an outlier because though they had a far more robust and diverse economy they threw everything into finance and have just burned any bridges back.
That's not really true.
https://commonslibrary.parliament.uk/research-briefings/sn06...
The financial services sector only contributes around 7% of total UK economic output.
Now that Ireland has passed most of the rest of the EU in GDP per capita, it's time to pull that back, and that's starting to happen.
The UK...well... ¯\_(ツ)_/¯
It's not a British Isle -- it's an Irish one. Great Britain refers to the main island composing England, Scotland and Wales. The Irish isle of Ireland is composed of the two Irelands (Ireland and Northern Ireland). The 'British Isles' term is disputed by many Irish people. The reason it's not a geographic term is because it's not a river -- Britain is a geopolitical entity not a purely geographic one.
The fact the Ireland was head of the GDPR for the EU was merely an odd coincidence and has been rectified. You won't many upset Irish people over this.
> The British Isles are a group of islands in the North Atlantic off the north-western coast of continental Europe, consisting of the islands of Great Britain, Ireland, the Isle of Man, the Hebrides and over six thousand smaller islands. [They] include two sovereign states, the Republic of Ireland and the United Kingdom of Great Britain and Northern Ireland.
No-one in Ireland would refer to them as the British Isles.
Simply Britain and Ireland (or Ireland and Britain) is far more commonly used if referring to the archipelago.
The talk pages and edit history for the Wikipedia article on the British Isles term are interesting. You can see the arguments and edit wars. Much like the insistence on naming the country page for Ireland the "Republic of Ireland' (which is our football team and country descriptor, not the name of the country), I think Wikipedia are on the wrong side of history here, but some editors até vociferous in their objections to change.
My tech co has spent a significant amount of energy complying with GDPR and CCPA the last couple years while the products have received less and less feature improvements.
A brand new entrant would likely bolt on compliance to their innovative product once it reached critical mass, not before.
Big tech can easily deal with regulations, they have money. A new social network? It doesn't stand a chance, especially if they raised money in Europe.
I wonder if Big Tech will bail out the EU once they collapse on their debts.
However what the GDPR demands seems absolutely reasonable. All it requires is that the company must be transparent with what data it collects, how it uses it and gives each individual control of whether they want to allow Facebook to collect and use their data for specific purposes.
If Facebook can’t sustain itself without stalking everyone, it’s a problem with Facebook, not with the GDPR.
US: We'll bring the software!
China: We'll bring the hardware!
EU: We'll bring the regulation!
https://slatestarcodex.com/2014/11/21/the-categories-were-ma...
EU law makes news. It doesn't make many obvious appearances in day to day life when you're living there, however.
The UK was definitely the country which stood out the most in EU, so after Brexit, the EU lost one furthest away country in its block, in terms of diversity.
EU law cover stuff you hardly run into. Sure, you have euros everywhere but they don't regulate how much taxes you pay or how your national health care is managed.
All is fine until they start regulating on things that matter. Immigration is definitely one of the first sector where people started noticing they're in the EU, because they're unhappy with the results.
The difference is that the EU tries to protect people in different aspects like social rights or privacy. The US does not offer similar protection, so in some sectors you don't hit the bureaucracy.
Provided the GDPR now actually gets enforced, this would clean up the web from all the obnoxious consent flows (remember those are not compliant with the GDPR to begin with).
This will also make Facebook and similar monopolies less toxic as they'd have to either obey the law at a loss or start charging for their services, opening themselves up to competition.