
Why big tech should fear Europe - mpweiher
https://www.economist.com/leaders/2019/03/23/why-big-tech-should-fear-europe
======
sbacic
I think Europe is dead set on legislating itself into digital irrelevancy.
Instead of focusing on the obvious question (why is there not a single
European company in the top 15 internet companies?) they're obsessed with
finding ways to tax US internet giants as much as they can, in any way they
can, without giving a damn about the collateral damage they are causing to
their own small businesses in the process.

What should _really_ concern the powers that be is that Europe has become a
place to sell things, not make them.

~~~
Reedx
> why is there not a single European company in the top 15 internet companies?

I'm curious about that too. Anyone have a good answer as to why there isn't at
least 1 by now?

~~~
repolfx
Seems like a mix of things:

• The culture of incentivising employees with equity stakes is mostly a US
thing. It's not widely practiced outside the USA. ARM is a rare example of a
British tech firm that gave out equity to early employees, and not
coincidentally, ARM was (up until it got bought by the Japanese) one of
Europe's tech success stories.

• Lack of a comparable venture capital ecosystem of the type that came out of
the success of Silicon Valley.

• The EU single market is (a) relatively new and (b) overhyped. It's still
much easier to sell across state lines in the USA than it is to sell to the EU
market, for all kinds of reasons. Of course the single market made it a lot
_easier_ but still not as easy as when there's a single language, a well
established federal-level trading code that's been around hundreds of years
etc.

• During the time the big US tech firms were establishing themselves and
taking off (the 1980s), Europe was riven with hard socialism and even
dictatorships. Spain was a dictatorship up until 1982, and they then elected
socialists. France has famously strict labor laws that make it extremely risky
and hard to try and grow a startup (which is already risky and hard). Italy
was bogged down from the 70s-90s and arguably still today by heavily broken
interventionist labour market, and terrorism/political instability. Germany
didn't liberalise its labour markets to something approximating US standards
until the Hartz IV reforms in the early 2000s and of course was split in two
with one half being another dictatorship until 1991. During the 1980s the UK
was busy recovering from a near-fatal economic meltdown caused by
confrontations with hard left unions, that had rotating power cuts, three day
weeks, garbage piling up on streets and an IMF bailout. Thatcher spent the
whole of the 80s trying to bring the UK back to western liberal standards of
growth and prosperity, so it wasn't an environment conducive to making a
Microsoft or an Apple.

So it's a combination of US style VC fuelled tech ecosystems taking decades to
grow, lack of equity-based incentives, most of Europe not having had
sufficient political stability during the time companies like Apple,
Microsoft, Intel etc were becoming established, and large parts of Europe even
today still having radically more socialist governments and economies than the
USA with the concomitant difficulty of growing any kind of startup at all, let
alone high risk/high reward tech startups.

~~~
charlysl
> Spain was a dictatorship up until 1982

Nope, the dictator died in 1975, and there were free elections in 1977 (won by
the center-right, not the socialists) and ever since
([https://en.wikipedia.org/wiki/Spanish_transition_to_democrac...](https://en.wikipedia.org/wiki/Spanish_transition_to_democracy)).

~~~
repolfx
Hmm. I guess there are conflicting sources and views on this. Your page says:

"At its latest, the Transition is said to have ended with the first peaceful
transfer of executive power, after the victory of the Spanish Socialist
Workers' Party (PSOE) in the 1982 general election."

That's where I got the date from. I guess I don't consider a country to be
democratic until there's been at least one election where the previously
elected government agreed to leave.

~~~
charlysl
> "At its latest, the Transition is said to have ended with the first peaceful
> transfer of executive power, after the victory of the Spanish Socialist
> Workers' Party (PSOE) in the 1982 general election."

The Transition, but not the Dictatorship, very different.

EDIT: original reply way too turgid

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jimmy1
> Why big tech should fear Europe

 _Big Tech decides regulations are too costly, leaves Europe completely_

European bureaucrats: suprised_pikachu.jpg

But seriously, If this does happen I am sure the tech talent can rebuild what
left, and that might be better overall for general prosperity, or it might not
be, and the crippling cost of compliance shutters new growth. I guess we will
soon enough figure out either way.

~~~
Teknoman117
In 2011, 33% of all internet traffic went though Google hardware even if it
wasn't destined for a Google service. With the rise of Azure, AWS, Compute
Engine, etc., I can only imagine that number is a lot worse today.

How seriously could the cloud companies cripple Europe's internet if they all
banded together? If they were to block and European traffic though any device
they owned...

~~~
CharlesColeman
> How seriously could the cloud companies cripple Europe's internet if they
> all banded together? If they were to block and European traffic though any
> device they owned...

That sounds a lot like an internet blockade...and blockades are _acts of war_
:

[https://www.britannica.com/topic/blockade-
warfare](https://www.britannica.com/topic/blockade-warfare)

I'm sure the US Government would have something to say to companies that
decided to wage a kind of private war on _allied_ nations.

~~~
oaiey
It is not the government which will intervene but the thousand of companies
relying on the cloud vendors. Europe is in average 10% of the world market
(just by people).

------
buboard
Next up: the EU legislates 4% growth

------
dmitriid
> Europe could soon pass new digital copyright laws.

If they mean Article 13, that law benefits big companies, and big companies
only.

A good overview:

\- [https://juliareda.eu/2019/02/eu-copyright-final-
text/](https://juliareda.eu/2019/02/eu-copyright-final-text/)

\-
[https://juliareda.eu/2019/02/article-13-worse/](https://juliareda.eu/2019/02/article-13-worse/)

~~~
pascalxus
"Should a court ever find their licensing or filtering efforts not fierce
enough, sites are directly liable for infringements as if they had committed
them themselves. This massive threat will lead platforms to over-comply with
these rules to stay on the safe side, further worsening the impact on our
freedom of speech."

And, lets not forget, This is an enormous liability ripe for legal abuse.

~~~
ApolloFortyNine
What's scary about this to me is any implementation of ContentID will be based
in some sort of score way, determining the likelyhood that something is
infringing.

These scores would be completely arbitrary, but you should be able to imagine
the outcry if it became public that Google set the score for removal to 1000,
but if they had set it 5000 would have blocked 5 times more copyrighted
material. The public/politicians wouldn't understand these numbers are both
made up (and so any difference between them is really meaningless), and would
lead to more blocking of legal material.

------
throwaway_9168
Big tech has _nothing_ to fear at all. Europe is waging an all out war on
companies/entrepreneurship of every size. Big tech will probably face massive
losses. On the other hand, a bootstrapped company/MicroISV or whatever you
want to call it these days will not face any loss, because it would have been
legislated out of even being born. So big tech will probably be secretly
cheering on the greater chance of establishing monopoly.

------
devoply
Europe should kick out or properly tax all the tech giants operating in its
borders. It should also figure out a way to foster local competition for all
that large tech companies. I wonder what would happen if they poured a couple
of hundred billion dollars into a facebook competitor. Facebook's network
effects are legion but their technology is trivial to copy.

~~~
luckydata
Why would Europe finance its own version of a cultural cancer? Investing in
business tech would make TONS more sense.

~~~
oaiey
Have not we done that in the past :)

------
hashberry
GDPR compliance is expensive to implement correctly. It's more about data
regulation than privacy. It hurts small startup firms who don't have the
resources or time, and rewards large companies that do.

~~~
Hamuko
>GDPR compliance is expensive to implement correctly

It's really not unless your business model involves selling data.

~~~
noir_lord
Basically this.

We don't sell data, We make things which we sell to people.

GDPR was a pain in that it was work we didn't previously have to do but it
wasn't hard to comply with.

FWIW I'm completely in favour of it as well, it's about damn time.

