[ancorevard]

Will future tech companies bother making their products available in the EU? Will it be worth it, or is just too big of a risk with uncertain outcomes?

[jsnell]

It's funny that there are two common and opposite narratives in HN comments for EU fines on tech companies. The is to claim that the fines are far too small, and the companies will happily just continue breaking the laws and treat the fines as a cost of doing business. The other is that the fines are so impractically huge that they're going to drive the companies out of the EU entirely.

Both narratives are just nonsense. The goal of the fines is to change product behavior immediately, and to act as a deterrent for illegal product changes in the future. The fines seem pretty well calibrated for that. $1 billion is real money even to Meta. They can't afford to ignore this and other similar issues, and will need to at least make an effort that looks like good faith enough to avoid the fines ratcheting up higher.

But on the other hand, Meta probably makes on the order of $10 billion / year in profit in the EU. They're not about to leave. Like, even in that one year (2018?) when Google ended up adding a separate line item for EU antitrust fines into their financial statements there was no chance they'd leave.

[troad]

There's very little chance they leave entirely, but there's every chance future products or functionality simply don't roll out in Europe due to regulatory uncertainty. In as far as the goal of the fines is to 'change product behaviour', it's working. Europe is, for the first time in my adult life, being specifically and deliberately excluded from tech roll-outs. Right now that's still nascent, but let's see where we're at in five, ten years.

It will also have a disproportionate impact on small and mid-sized businesses. Apple, Meta, etc. have the lawyers and profit margins to do EU compliance; many smaller companies do not, but were they to trade in Europe, they would be exposed to the same risk of arbitrary fines issued for non-compliance with complex and unclear laws. This sort of thing has a chilling effect. There's nothing particularly commendable in passing deliberately vague laws designed to facilitate the arbitrary enforcement of fines - it's a fraying of the rule of law.

And to the glib sarcas-bro who's about to say 'good riddance', just remember that this is Hacker News. Innovation is good, actually. Smart-watches with medical sensors, AirPods as hearing aids, those things are good, and missing out on future versions of tech like this is not a win.

[xvector]

Except the change the EU is trying to encourage with this ruling is really absurdly dumb. It's clearly and transparently rent seeking.

We are already in a trade war and the only one that refuses to acknowledge it is the US. The US needs to embargo and deprive EU of the essential tech infrastructure they provide it. Just turn it off or brick it one day and leave the EU scrambling to catch up with 20+ years of stagnation and missing services and hardware.

Let's see how good it will be for the consumer when tech just leaves. Maybe then they'll change their regulations to something that works to enable technological progress and innovation.

[maronato]

Will future pharma companies bother with creating new drugs if they have to get FDA approval? Will engineering companies bother drafting new projects if they have to pass safety inspections?

Every other industry thrives despite regulations. It’ll be no different for future tech companies.

[xvector]

If you have ever worked in pharma you know that literally thousands of promising drugs have been left on the table because the regulatory costs/burdens to see the ideas through are simply too high. It is maybe one of the greatest travesties in the sphere of human health.

At this point, only the easiest and most obvious wins are worth pushing through the regulatory gauntlet. Innovation has been strangled. It's not even worth trying something unless you are 110% certain the costs will be recouped and it's worth spending billions to get it approved.

[philjohn]

It's a large market, and more profitable than APAC and RoW per user (just look at the Meta investor presentations which show that it's US, followed by the EU then APAC and RoW[1]).

[1] https://s21.q4cdn.com/399680738/files/doc_financials/2024/q3...

[jahabrewer]

The slide I see says _revenue_. I think you have to consider cost of revenue too, and these EU fines affect that.

So if the EU goes to fines being "% of worldwide turnover"... do the math

[bantunes]

Telling that you think this is happening just because their products are available in the EU and not because they were "acting in a way that gave it a significant advantage over competitors" as the EU claims.

[Johanx64]

Except for VR headsets, I reject the notion that facebook/meta is a "tech" company.

[chung8123]

They have done a ton of advancement in AI. They also have to have the infrastructure to handle so many users. I feel like they fall squarely in the tech company world.

[zeroonetwothree]

Do you think “tech” excludes software or something? That wouldn’t be a normal definition.

[miohtama]

For Facebook for sure, as they are eating the lunch of local medias by being able to serve smaller advertisers with more targeted campaigns.

[whazor]

It is a much bigger risk to leave the market and to potentially gain a scary competitor.

[max51]

The outcome is only uncertain because they are blatantly ignoring the laws.