
Short-Run Effects of GDPR on Technology Venture Investment - Dowwie
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3278912
======
Thiez
I notice Brexit is mentioned only once in the paper, in a footnote mentioning
that Great Britain is considered part of the EU for the purpose of their
research. Another article currently on the HN frontpage discusses the effects
of Brexit on companies [1], blaming Brexit for reduced investment and
companies leaving the UK.

While I am absolutely open to the possibility that the GDPR has negative
effects on technology venture investment (as their paper suggests), I am a bit
disappointed that they did not attempt to correct for the effects of the UK
leaving the EU. At the very least it would have been nice if, in addition to
graphs for the entire EU, there were graphs for the UK alone, and also for the
EU without the UK. That way it might have been possible to get a vague
impression of how much these numbers are affected by Brexit instead of the
GDPR.

1:
[https://news.ycombinator.com/item?id=18431564](https://news.ycombinator.com/item?id=18431564)

~~~
KineticLensman
> At the very least it would have been nice if, in addition to graphs for the
> entire EU, there were graphs for the UK alone, and also for the EU without
> the UK.

That would seem to require that the Crunchbase dataset referenced in the paper
(but not discussed in terms of its content or format) was broken down in terms
of specific businesses and their host country.

The actual effects of the UK's exit are not yet known (the post-Brexit UK
might even grandfather in some EU law like GDPR), and the article [0]
mentioned in the other HN story (your ref 1) is not definitive, e.g. for
Pfizer it says: "Pfizer’s preparations are well advanced to make the changes
necessary to meet EU legal requirements after the U.K. is no longer a member
state, especially in the regulatory, manufacturing and supply chain areas". To
me this isn't a basis for inferring what Pfizer will do with respect to GDPR

[0]
[https://twitter.com/uk_domain_names/status/10615540262848348...](https://twitter.com/uk_domain_names/status/1061554026284834817)

~~~
mrec
> The actual effects of the UK's exit are not yet known (the post-Brexit UK
> might even grandfather in some EU law like GDPR)

By default _all_ existing EU law is grandfathered in, as a new legal category
of "retained EU law". Changing or dropping individual laws would be considered
on a case-by-case basis. The main legal significance of Brexit is that EU
institutions will no longer be able to impose _new_ legislation on the UK.

[https://en.wikipedia.org/wiki/European_Union_(Withdrawal)_Ac...](https://en.wikipedia.org/wiki/European_Union_\(Withdrawal\)_Act_2018)

------
mellett68
It's fun when people complain about having to handle personal data properly
and not to collect more than they need.

Bad luck, be responsible.

~~~
virmundi
I’m interested in how the vagraties of the law plays out. I’m working on
software that won’t use ads or CDNs. All traffic terminates with my system. I
will use cookies. I have no intent on putting up one of those cookie
notification banner. All data I collect is to run the site. While that is
valid under GDPR, I bet the EU will come a knockin for a fine if the site gets
big enough

~~~
ginko
>While that is valid under GDPR, I bet the EU will come a knockin for a fine
if the site gets big enough

Why would you think so?

~~~
virmundi
I don't trust the EU. They seem to go after companies with deep pockets when
they need money. Look at the Google Android controversy lately. Nokia, any EU
phone creator (are there any?), any EU phone creator that wants to get in the
market can all create a phone that is not Android. Google traded the OS for
install preference rather than money. It's called bartering. The EU let this
go for years. Now Alphabet has money and no one in the EU stepped up to take
on Android, so the EU wants its pound of flesh.

Will my project run afoul of the 3rd party rules? No. May I have to spend
money on legal protection from the EU when they erroneously come asking for
money? Maybe. This is my issue. I don't know. The EU says it has policing
power across the globe. If an EU citizen steps foot in the sovereign territory
of another country, the EU says that all their privacy laws apply.

~~~
dasil003
I find it shocking how quick some people are to denounce government
intervention these days. Are you seriously not concerned about Google’s market
clout and the amount of data they have? Thank god the EU is there to temper
their entitlement a bit.

Meanwhile you’re sitting here daydreaming about how your startup is going to
be so big EU regulators are going to come after you. Well that would be an
excellent problem to have, in actuality you are far more likely to be killed
by Google sucking the oxygen out of your market.

~~~
virmundi
I don’t care about Google’s clout. I use them for less and less and where I
use them I don’t care.

I use them for email. My email is essentially a curated spam folder. I seldom
use it for anything of value. When I do use it, I could care less if the
information was made public.

I use it for online storage,but again for nothing important. If I lost it all
tomorrow my only care would be an outstanding, meaning not yet turned on,
assignment for my ML class.

Everything else I accept in trade: my data for their service. I use Google
Maps. I accept that when I’m driving they will track me. I hope they do. I
want to know if I should get off the interstate due to a traffic issue.

I don’t watch TV. I have Ad Guard filtering at the network router level. I
block Facebook and Twitter there too. I don’t use porn. All Google knows is
that I’m a particularly boring human being that probably purchased a dobro
given my uptick in how to play the dobro videos. They probably also infer I
have mild body dismorphia given some Sapien Medicine videos/sounds I listen
too regularly.

All this I, a consenting adult, allow them to know in trade for their service.
If you don’t like them, there are free means to thwart them. Google will
provide you the means to figure this out with their search. As a result, no I
don’t care for this kind of worthless handwringing.

Go after the leaks at the credit agency. I have no choice but to participate
with them. No banner would allow me to opt out.

Don’t go after some social media company that we all know is going to sell
your data that you traded to get their service. We scientifically know that
social media is bad for us all. Why regulate straws when that pandora’ Box of
depression is allowed to continue? Grow up. Be an adult. Take responsibility
for your choices and entitlement.

~~~
Bjartr
> Grow up. Be an adult.

Are you really so sure of your views that you feel that those you disagree
with must be less mature than you?

> I use Google Maps. I accept that when I’m driving they will track me. I hope
> they do. I want to know if I should get off the interstate due to a traffic
> issue.

You may well already do this, but to actually achieve only being tracked while
actively using Maps, I believe you'd have to turn location services on and off
each time you use Maps, otherwise Google is tracking you all the time, not
just when Maps is open. Assuming an Android device, I'm less sure about how
this would play out on iOS.

> All this I, a consenting adult, allow them to know in trade for their
> service. If you don’t like them, there are free means to thwart them. Google
> will provide you the means to figure this out with their search. As a
> result, no I don’t care for this kind of worthless handwringing.

i.e. you are A) aware of what they are doing B) understand that you can
intervene and have the skills to put such efforts in place C) hold values such
that the tradeoffs doing so implies is acceptable to you.

If everyone was similar to you in these regards, there wouldn't be an issue,
but people's awareness of the issues, skills, and values are hugely variable
across a population. So while it's worthless handwringing to _you_ , people
who hold different values could (and do) disagree.

> Go after the leaks at the credit agency. I have no choice but to participate
> with them. No banner would allow me to opt out.

Good idea. However, I don't think it's reasonable to assume that the efforts
against misuse of personal data online are entirely fungible towards efforts
of credit agency reform. i.e. not doing this doesn't mean more of that would
happen, or that doing this keeps that from happening too.

> Take responsibility for your choices and entitlement.

AFAIK, telling people this isn't effective, so it can really only serve to
make yourself feel superior, not really effect change (since I'm assuming you
consider yourself to already follow this advice)

~~~
virmundi
> AFAIK, telling people this isn't effective, so it can really only serve to
> make yourself feel superior, not really effect change (since I'm assuming
> you consider yourself to already follow this advice)

I don't see how any of that follows. You can either a) leave the net of Google
by switching browsers, going back to flip phones, going to Apple, etc, or b)
say that the cost is worth your inertia.

As for not being effective, please look at Unions (non-government means to
counter corporate power). Look at the black community before the Democrats got
a hold of them. Harlem had its problems, but was the seat for art and culture
that still benefits humanity to this day.

> Are you really so sure of your views that you feel that those you disagree
> with must be less mature than you?

Yes. The people that hold the view that papa Government will fix everything
are thinking emotively like a child. Reagan, for all his flaws, was right:
"The most terrifying words in the English language are: I'm from the
government and I'm here to help." The EU is going to crush, either through
GDPR or the new copyright tracking system all startups in the tech area until
the tech companies bootstrap without ads. Maybe this is ultimately good, but
it would be a side effect of the regulation, not the government's wisdom.

> You may well already do this, but to actually achieve only being tracked
> while actively using Maps, I believe you'd have to turn location services on
> and off each time you use Maps, otherwise Google is tracking you all the
> time, not just when Maps is open. Assuming an Android device, I'm less sure
> about how this would play out on iOS.

If you're a good citizen of the world you should turn off location to save on
greenhouse gases. Android is terrible at efficiency with those on. They should
lock out when not directly used by an application.

> If everyone was similar to you in these regards, there wouldn't be an issue,
> but people's awareness of the issues, skills, and values are hugely variable
> across a population. So while it's worthless handwringing to you, people who
> hold different values could (and do) disagree.

So because there are dumb and or lazy people, the EU needs to attempt another
centrally plan attempt at controlling the evolution of the species? Are we
going to get State monitors for using the toilet correctly? Think about how
many diseases are from improper flushing and wiping. How about a bathroom
monitor that's armed with a stun gun to make sure people wash their hands?

~~~
Bjartr
>>> Take responsibility for your choices and entitlement.

>>> \- You

>> AFAIK, telling people this isn't effective, so it can really only serve to
make yourself feel superior, not really effect change

>> \- Me

> I don't see how any of that follows. ... look at Unions

> \- You

I think you misunderstood me, or are replying to more than what you quoted
here, because I'm not sure what unions have to do with the statement you did
quote from me.

I am saying that the literal act of telling people to "take responsibility for
your choices and entitlement" isn't an effective way to have more people take
responsibility for their choices and entitlement. Your saying it _is not
useful_ in furthering your implicit goal of getting more people take
responsibility. 99% of the time the only thing that that statement will do is
make you feel superior because you believe you're already doing that.

> The people that hold the view that papa Government will fix everything are
> thinking emotively like a child.

I mean, the way you phrased that makes it practically a tautology. I'd suggest
you consider that there could possibly be other reasons look towards the
government for solutions beyond mere naivete.

If you understood those reasons, then you could address them and potentially
convince people that they should change their mind. However, I will again
point out that it is your approach here that will get in your way. Calling a
person childish, if they are not being childish, will result in them
dismissing what you have to say because you are insulting them. But calling a
person childish, when they _are_ being childish, will result in a metaphorical
fingers-in-ears-going-la-la-la-la response _because they are being childish_.

> Government will fix everything

I agree the government cannot fix everything, however I also believe there are
classes of problem that a government, or government-like-entity, are better
capable of addressing than the alternatives, but you're so busy calling people
immature and smugly telling us how you've got it all figured out that I doubt
you'd be willing to take the time to try to understand that (I'd love to be
wrong about that, mind you)

>If you're a good citizen of the world you should turn off location to save on
greenhouse gases.

If you're a good citizen of the world, you wouldn't use a phone containing
compounds taken from strip-mines that poison the surrounding ecosystem and
then had to be shipped on a pollution belching freighter halfway around the
world.

> Android is terrible at efficiency with those on.

How much worse? Over the lifetime of a phone, how much more energy will be
used? A ballpark, order-of-magnitude, fermi estimation would be good to have
for this. Heck, I'll do it so we can see:

Assumptions:

* 5,000 mAh battery (this is higher than all flagship phones this year[0])

* To get watt-hours assume a li-po battery operating at 4.2 volts (higher of two standard voltages for li-po[1])

* 3 year lifespan (Higher than the US avg replacement cycle length[2])

* The phone battery is completely drained by the end of the day

* The phone battery is fully charged by the next morning

(3 years * 365 days) * (5,000 mAh * 4.2 volts) = 23 kWh[3] which is about 7.66
kWh/yr.

To put this in perspective a kWh costs 12 cents on average in the US, and
boiling 1 cup of warm-ish (65-70 degree F) water takes around 150 Wh[4], which
works out to mean that a person could offset their phone's energy usage by
having one less cup of coffee per week.

But I estimated high on everything, so in practice a phone will use less than
23 kWh over its lifetime, probably significantly less.

This all puts aside the immediate question of why are you bringing energy
efficiency into a discussion about privacy?

> controlling the evolution of the species?

Maybe I'm missing something, but I don't really understand what privacy laws
and evolution have in common. I'd appreciate an explanation.

>> people's awareness of the issues, skills, and values are hugely variable
across a population

>> \- Me

> So because there are dumb and or lazy people, the EU needs to attempt
> another centrally planned ...

> \- You

First, I'm kind of impressed that you managed to interpret what I said to mean
that some people or dumb and/or lazy. Why do you believe that different from
you is bad?

Second, assuming your real question is more like "On what basis is the EU
passing a law imposing these restrictions about personal data on companies?".
I would say the reason is because a majority of the EU constituent country
leaders believe that doing so upholds the values and goals of the EU. For
example "The goals of the [EU] are... promote peace, its values and the well-
being of its citizens" and "Individual freedoms such as respect for private
life,... and information are protected by the EU" and "Human rights are
protected by the EU Charter of Fundamental Rights. These cover ... the right
to the protection of your personal data"

tl;dr That's the point of the EU [5]

> Think about how many diseases are from improper flushing and wiping. How
> about a bathroom monitor that's armed with a stun gun to make sure people
> wash their hands?

As long as we're being sarcastic, I'll say that that sounds like a great way
to create jobs.

More seriously, I believe the EU does have laws about food workers washing
their hands after using the restroom. If it could be shown that enough lives
would be saved by extending those laws, and their enforcement, to be worth the
expense, I don't doubt the laws would eventually change to account for that.

[0] [https://www.digitaltrends.com/mobile/which-2018-flagship-
pho...](https://www.digitaltrends.com/mobile/which-2018-flagship-phone-has-
the-best-battery-life/)

[1] [https://learn.adafruit.com/li-ion-and-lipoly-
batteries/volta...](https://learn.adafruit.com/li-ion-and-lipoly-
batteries/voltages)

[2] [https://www.statista.com/statistics/619788/average-
smartphon...](https://www.statista.com/statistics/619788/average-smartphone-
life/)

[3]
[https://www.wolframalpha.com/input/?i=((365+*+3)+*+(5000+mil...](https://www.wolframalpha.com/input/?i=\(\(365+*+3\)+*+\(5000+milliamp+hours\)\)+at+4.2+volts+in+kWh)

[4] [https://www.plotwatt.com/2011/05/21/plotwatt-labs-boiling-
fo...](https://www.plotwatt.com/2011/05/21/plotwatt-labs-boiling-four-cups-
water/)

[5] [https://europa.eu/european-union/about-eu/eu-in-
brief_en](https://europa.eu/european-union/about-eu/eu-in-brief_en)

~~~
virmundi
The species would be better off if we, in the West, did not have the
centralized government. The population would be lower and better off without
it. Starvation is a motivating factor. We've removed many people's will to go
on by feeding them and housing them in government created slums. We'd be
better off if they never existed. Sadly the central government won't require
sterilization in exchange for government aid.

As to the general idea of the government figuring things out, I'd rather have
a world where humanity comes to a homeostasis due to conflict and pollution
than to live in the dystopian world that Merkel and her ilk are bring forward
with their new Empire.
[https://www.telegraph.co.uk/business/2018/11/12/france-
calls...](https://www.telegraph.co.uk/business/2018/11/12/france-calls-eu-
empire-warns-euro-break-up-next-crisis/)

However, I don't think we need to go to that extreme. People should take
responsibility for their data. They should figure out what they care about and
seek means to realize their ends without requiring an Empire to bring its
claws to bare by fines.

As to "dumb or lazy" you implied it. I said if they cared about it, they can
shut it off by doing a simple Google search. If they don't care about it, they
can leave the status quo. If they care and can't be bothered figure it out,
which I don't think there will be too many that can't even ask for help, then
they are lazy. Your argument is that the bulk of the EU population is in the
lazy/dumb camp since the primary reaction you're condoning is regulation.

------
StavrosK
Otherwise read as "turns out that you make less money if you aren't allowed to
sell people's private data off".

What else is new?

~~~
AnthonyMouse
There are two effects here. One is you don't make as much money from
advertising, true. Though even that is still a cost -- that money had been
funding R&D and subsidizing access to services for low income people.

But in addition to that, there is the deadweight economic loss from the
compliance cost destroying low margin operations with positive externalities,
and reducing competition which allows incumbents to become more abusive.

~~~
StavrosK
I expect the latter to be reduced as the kinks get ironed out and knowledge of
compliance becomes more widespread, kind of like the economic loss from the
compliance cost of not cheating on your taxes is pretty low by now.

~~~
AnthonyMouse
That is completely the opposite of what happened with taxes. The complexity
was such a problem that the law was changed so that as many people as possible
would take the standard deduction, i.e. the tax law basically exempted small
players from the complex rules.

And even then the tax complexity still disadvantages small players because
their larger competitors have the resources to use the complexity to their
advantage and end up paying less tax.

------
Carpetsmoker
Not everything is about the economy.

~~~
SmellyGeekBoy
Considering "the economy" determines whether or not we can eat, have somewhere
to live, get access to healthcare etc. (rightly or wrongly), I'd say it's
pretty central to everything that we do as a species.

~~~
Carpetsmoker
Facebook isn't contributing one iota to any of these things, and neither are
most tech/internet companies.

Whether or not we can eat is determined by farmers, truck drivers,
distribution centre workers, store clerks, etc.

Whether or not we have somewhere to live is determined by construction
workers, electricians, plumbers, engineers, etc.

Access to health care is determined by doctors, nurses, pharmacists, etc.

All these things existed well before the internet. In other words, we'll be
fine.

Not all parts of the economy are equal. Losing 25% of farmers or doctors would
be catastrophe. Losing 25% of electricians would be a problem. Losing 25% of
software developers would be a bit annoying. Losing 25% of marketers would be
a reason for a party.

~~~
Mary-Jane
Is this perspective so pervasive on this forum that no one's going to
challenge these incredibly naive statements? The economy is intertwined with
virtually all parts dependent on or at least benefiting from the others.
Software contributes to increased efficiencies all across the economy; from
food production to fuel consumption to medical diagnosis the world would be
demonstrably worse of without it (and the people who wrote it).

~~~
toomuchtodo
I would argue your fallacy is lumping people who work on software that matters
(food, healthcare, government) with people who work at Facebook (which is
arguably a cancer on society).

Good software engineers are needed to work on problems that matter. Quite the
delta from where we are today.

------
germanyhater
EU is a nightmare for any startup. Instead of developing new products, you
have to spend >50% of your time just to comply with all those laws. and it
keeps coming. Soon, every company will also be required to build copyright
filter for all uploaded media files (content-id)...

~~~
phatfish
I trust the EU to respect my rights far more than some startup trying to get
an exit as fast a possible.

If they get bankrupted by a GDPR fine then their business model needs a
review.

~~~
JumpCrisscross
> _I trust the EU to respect my rights far more than some startup_

This is an odd statement to continue seeing, given we’ve now seen GDPR
weaponised by an EU member to stifle journalists investigating corrupt
politicians [1].

We need regulation protecting privacy. The debate is whether GDPR does that
effectively ( _i.e._ causes the intended effects) and efficiently ( _i.e._
with minimal undesirable side-effects). Saying “if they get bankrupted by
GDPR...then their business model [is bad]” is extreme because it assumes
without evidence GDPR’s efficiency.

[1] [https://www.occrp.org/en/40-press-releases/presss-
releases/8...](https://www.occrp.org/en/40-press-releases/presss-
releases/8875-occrp-strongly-objects-to-romania-s-misuse-of-gdpr-to-muzzle-
media)

------
robertsd247
I could be oversimplifying this but would the way to defeat GDPR is to make
sure an individual cannot be identified through routine web site data
collection?

~~~
lmkg
Yes, one way to "defeat" GDPR is to comply with the spirit and letter of the
law by not performing routine automated surveillance.

