> We will look in detail at whether this data gives Facebook an undue competitive advantage
Isn't that a lose/lose for Facebook? Either the answer is "Yes" and they'll be fined or it's "No" which makes advertisers question whether or not they could get the same product cheaper elsewhere.
Another alternative would be that Facebook will acknowledge that it gives them an advantage, but argue that that advantage is not undue. I would assume that whenever a firm does a thing, it is because that thing is advantageous or else reduces some disadvantage. That is as it should be. The trouble is when the advantages stack up to create monopoly power and/or run afoul of consumer or industry protection laws.
I’m disappointed that governments’ ability to reign-in misbehaving companies is predicated on them having a de-jure monopoly, as though its like magic enchantment: “naa-naa! You can’t touch me! I’m not declared a monopoly!”.
I don’t see monopolies themselves as being particularly special, I think laws to restrain the holders of captive-audiences in general would be more useful and serve the public good.
If I were in the EU, I'd be more worried about political interference from Facebook. They'll have built up the experience to sway elections and they are going to be easy for the various three-letter American agencies to influence.
Facebook should be treated as falling under the "massive foreign media company" banner; but more extreme.
It's 5 years too late, however it is welcome still.
It's a shame that it is missing the most important part where company such as Facebook gets their competitive advantage over smaller local companies - that is tax avoidance. You cannot compete with a company that has a significantly smaller tax burden than yours.
I think the UK and EU should be looking at creativity of accounting, how money flows between entities and how profits disappear or are converted into tax free or near tax free money. They need to look also how this money is then is being used. Is it used for lobbying? Hostile take overs?
I am worried that these days regulators sound tough to signal they won't sell themselves cheap, then lobbyists get involved and the whole issue melts away, except that another cohort of politicians get rich. It's a vicious circle.
This is something that has been decades in the making. The combination of Covid and political-wind changes in the US seems to have created a historic opening to address one of the biggest issues about globalized trade. Fingers crossed that something can be put in writing this year, it has the potential for going into the history books just after Bretton Woods and Maastricht.
The article talks mostly about proposed minimum CT rate. It seems like something FAANG companies would love to be implemented - as they can say you see we are in the clear, the tax avoidance measures are up and we comply... and then they continue to hide profits, meaning business as usual.
This meeting seems like virtue signalling rather than something with material consequences.
I hope I am wrong.
FAANG are the declared target of this action, if they find loopholes too quickly these governments will throw the book at them. A pound of flesh is necessary, at least for some time. I don't doubt that they'll find new loopholes eventually, but for a while they'll have to pay more.
There being political movements to end the race to the bottom is still a huge step. I can't imagine this ending in appeasement rather than a thirst for more.
This applies to every single big company. Current tax codes heavily promote being big company, that can afford all the tax optimization/evasion. Our economy forces you to grow big, so you can get benefits of scale, and have enough resources to invest into tax optimization.
And this is wrong as it discourages entrepreneurship and ensures that if you are born poor, you are destined to be a wage slave. That of course unless you get a bank loan or capture interest of "angel investors" and share your business with them.
> I think the UK and EU should be looking at creativity of accounting
I think the EU should look into the crazy high tax rates people and companies can experience in the EU and set a hard cap, because it is out of control.
For a start it'd be fair games if it was legally disallowed to tax individual at a higher tax rate than what EU servants are paying (somewhere between 5% to 12%, while for "plebs" not working in the EU it can quickly go above 50%. 50% + 19% social wellfare tax in my case).
I've personally had enough. I'm an expat now. I just created a company with another expat, living in another continent, and we picked a business-friendly place to incorporate.
The EU could have had my business had they been showing some willingness to be nice to business. But it only ever seems to go in the way of more taxes no matter which EU country you're in. Screw that: I'm out.
> ... except that another cohort of politicians get rich
That said I'm not sure politicians in the EU get very rich. It's not the US nor Russia where you get politicians billionaires (at least it's really not common). I don't think the president of France, for example, is paid more than an average SV wage (I think it's actually half that). The uncovered bribing cases in the EU have mostly been very petty: it's really sad for how cheap votes can be bought (say a dinner and a week-end paid in a nice hotel). We're talking about EU member of the European Parliament cheating on "presence tickets" (pretending they're there to vote when they're not) to collect about 300 EUR everytime they cheat (absenteism is so big that they had to incentive MEP to vote by introducing tickets were they'd get a little bonus everytime they vote). MEPs are cheating by signing in the friday mornings (votes are typically done on friday), so they get their 300 EUR bonus, but then they go home for the week-end. That's petty mindset, to make petty money, not rich.
I can't think of any politicians who became billionaires after being a US politician. Certainly some (rather famous) examples of billionaires who ran for office but the richest member of Congress is worth like a quarter of a billion dollars. Are there really no EU politicians worth that kind of money? There must be some descended-from-royalty members of Parliament somewhere.
The sad reality is that that the EU may have issued the fines but there are so many ways to delay paying them that it takes years for the EU to collect. I'm not even sure that Microsoft already paid their fine for the antitrust case from 2004.
Atleast as far as I know, fines, even disputed, of that size are paid immediately into a escrow account. When the dispute is settled, the fine gets paid to who won the dispute.
So MS likely had to shell out that 2004 antitrust immediately.
And at the same time eu is one of the best places to practice tax avoidance, with all inconsistent tax codes, combined with free market.
Those fines are fighting symptoms. Root causes of inconsistent law aren’t targeted. And for a reason - it allows EU to be business friendly, and at the same time keep tools to go after companies they view unfavorable.
I did a quick search for other news sites with the story before posting but couldn't find (this page appears to be free to view if you have an account)
Unfortunately this is probably the case. I don't see any alternative to the US pursuing an actual antitrust case against Facebook. No other lawmaking body has the full power over Facebook that's needed to hold them accountable.
