Europe v Google: Nothing to stand on

Yes, but search is very low on the list of industries where that matters.

Plenty European internet companies have trouble getting outside their founding country, sure, but the trouble is language, culture, lack of a unified media landscape, etc, not VAT rules. Anybody who tells you different is just trying to find a scapegoat for their inability to execute cross-culture.

This indeed makes Europe a more difficult starting point, but good luck fixing that with politics.

Not to mention the fact that before the digital age, when all international commerce actually involve moving physical goods across physical borders, Europe had no problem scaling up to multinational corporations.

While it would be nice to get the VAT problems sorted out, this is second to the problem of there being a couple dozen different languages being used in the EU. People shop domestically because they can use websites in their native language and when they have problems, can talk to customer service representatives in a language they understand.

It is really, really hard to get your service localized in couple dozen different languages (let alone provide actual customer service in all of them).

Even Amazon handles only a part of Europe, and if Amazon can't do that, what companies can? There are a few, but not all that many, and for many it isn't worth it, because your economies of scale quickly disappear when you have to build and maintain a separate presence in up to 28 different countries that mostly speak different languages. (That includes American companies, too, by the way, many of which simply choose to ignore Estonia or even Sweden and Portugal.)

In the US a belligerent defiance coupled with some strong lobbying goes a long way but, like you're seeing with Uber now, that approach doesn't work as well across the pond. Likewise in this case is just about challenging Google's use of its dominance to compete unfairly in other markets (which is illegal.)

That it happens to be about pushing domestic shopping sites down the rankings to favor their own results is rather incidental; at it's core this is just a shot across the bow to make it clear that if Google wants ad-money from Europe they must play by Europe's rules.

I hope Google gets that because these are not relationships you want to become adversarial or else someone might just decide to close the little tax loophole that lets Google escape taxation of its EU revenue.

I wouldn't say that too quickly. People tend to paint the EU as some bureaucratic behemoth, but the whole point of the project was to vastly reduce administrative overhead for deploying to EU markets, and it has done so quite successfully. Compare "meet EU standards and it can be sold everywhere in the EU" to "have to double check the standards for every country we want to deploy to" - it's pretty obvious why the former is easier to deal with.

In fact, one of the biggest problems it is currently facing is that it's running out of things to fix in that sense. When it was about standardizing, I don't know, legally allowed substances in perfume, the benefits of standardisation far outweighed the hassle of changing local regulation. Now that its doing all kinds of things that can't be summarized as "everyone will (begrudgingly) go along because even in the worst case it benefits every involved nation", it's much harder to reach a consensus this way (paraphrasing a few books on the EU from memory).

Anyway, standardised VAT rules could fall under the old "benefits everyone"-category of projects, even for non-digital goods, so who knows?

Although I would probably expand that out to ask why people from the UK also like to reason about (continental) Europe as a singular entity also, when they should certainly know better.

EDIT: I completely misunderstood, my bad. Not deleting this comment because it's already gotten a reply.

Apple, meet Orange: Surprise! They taste different.