People seem to forget that Europe is not a country. Europe does not have a single uniting language. What happens, is that every country starts their own smaller versions and they stay mostly within that country. If they want to move to another country, there's often already a major player there, and they might not have the means to kick them out.

I think the reason that silicon valley is so powerful, is that the initial market is 325 million people who all speak the same language. Once you get the US market, you have the size, name and means to easily start conquering European countries. It's always about scale...

Despite having many different languages, in some ways Europe is a more homogenous market than the US.

For example, an insurance business can operate freely across Europe with only one small piece of additional paperwork. I think it's actually an A4 piece of paper. In the US they'd have to be regulated separately by nearly every state.

French search in French, Germans in German, Danes in Danish, Spaniards in Spanish, Italians in Italian, Dutch in Dutch etc. Then, if your local language doesn't give you good results, you default to English.

Online shopping is mostly a local thing with Amazon as the prominent exception. Even in the market for plane tickets local websites dominate, meaning that a French person travelling from Paris to Berlin is likely to use a different website than a German guy travelling from Berlin to France. Again, the exceptions seem to be mostly American.

European countries even have their own payment solutions.

So how is this different from the current situation with Google dominating the market? Google works in French, German, Dutch, Spanish etc! You only need one company in based one country and they can work in all languages. And if they grow big, they setup offices in different countries, for country specific or language specific searching.

1. Slavic languages have heavy inflection. If Google doesn't understand all the possible forms of a word, it will give you poor results until you search again by changing your query slightly. 2. Google doesn't understand common synonyms, so it doesn't give results that contain synonyms. 3. Russian websites may not care about google rank as much as Yandex, so they might not even be indexed.

I don't know how, but there are thousands of websites I can find by searching Yandex for a certain thing that will not be on Google. It may be those three things combined, or other factors I didn't think of.

From our perspective the EU common marked is pretty much just a pipe dream. Being able to start a business in one EU country and just automatically have access to all of the 500million EU citizens would be awesome, but right now that not how it works.

I haven't done it but isn't the thing with the new VAT regulations that you can pay your taxes to one revenue service (and just register with one) and they will divide it according to your sales data (e.g. the customers country)?

Or do you mean that you have to pay VAT at all if you do this? In this case your problem is more political and about the concept of VAT in general. I mean almost any EU country had it for a long time. It sucks that there are huge differences when it comes to the exact amount but the concept itself is nothing new.

I think that only works if you have limited business, but I'm not sure. I believe the problem is that we're in a country with 25% VAT, but if we want to charge our German customer only 19%, we need to do that via a German company, otherwise we would have to charge them the 25%, leaving us uncompetitive (6% is more than our entire profit for some products).

If you mean VATMOSS then you don't have to be running a Limited Company - individual sellers as of January 2015 have to now account for the tax due in the country of the buyer. This apparently applies to sellers from outside the EU too, if you're selling certain classes of goods (non-personalised intangibles) over the internet to the EU then you're supposed to retain [3 pieces of!] evidence of the locality of the purchaser and deal with that country's tax office to pay the required tax.

The "MOSS" [Mini One-Stop Shop] bit is a system that individual countries in the EU use to send the payments to the countries where the tax is due.

The method you mention works for tangibles or personalised goods. With VATMOSS there is no exemption for SMEs or low-revenue situations or anything.

If you think you'll scale the business then it's best to start with a single company registered in a EU country of your choice. Generally, easiest to pick the one you will find easier to deal with, or you think you'll have the most sales in.

The local tax regulations will specify when you have to pay taxes in other EU jurisdictions. There are limited exceptions when you're just getting started. This only means registering for taxes - it's similar to the idea of US company registering to pay local state taxes.

Employing people is different and will require registering for employment taxes in each country.

Any competent business accountancy firm should be able to provide assistance: generally best to work with one which has relationships or offices in the other EU countries you're interested in operating in. If you can't afford that then your local government business department will be more than happy to help (as you are generating tax!): in the UK that's the Department for Business Innovation & Skills [1].

[1] https://www.gov.uk/government/organisations/department-for-b...

The only fact that the there are some 20 different languages makes the EU a much less omogeneous market than the US.

This withouth considering that each country has its own employment policies, social security services, healthcare system, education system, revenue service...

I'm strongly pro-union, but it's far from perfect, or even efficient, in the current state.

No, I don't think "in some ways Europe is a more homogenous market" is far-reaching at all, especially when accompanied by a concrete example.

Source: People pay me to do that stuff.

Search is now a mature industry, it is always better to go for the new places where there are no dominant players. Google biggest competitor is not another search engine but Facebook. This is the ways it is supposed to work.

If someone offer you a product cheaper than you can make it yourself, take the offer and find something better to do. Everyone looses by protectionism.

I think everyone forgets the innovation in Ad Words which made it possible for small businesses to thrive. One can now get started with 100$ marketing budget while one before needed 10000$.

It's funny, I've heard several times the total opposite from startup founders ("It's easier to go for a big market and to chunk some % in order to get viable, rather than going on a totally new market in which you'll have to both be better than the competition and convince the clients that's it's actually a promising market")

> If someone offer you a product cheaper than you can make it yourself, take the offer and find something better to do. Everyone looses(sic) by protectionism.

Uh? Protectionism has historically worked exceptionally well to develop your own industry, as a matter of fact, all the big players heavily used protectionism in their time to nurture their industry before being big (England, USA, China, South Korea). You just cannot compete with an on-going industry while starting from scratch, so your industry will never take off.

Protectionism is only good if you're already the best in town & want to be sure that you keep the upper hand, but it helps in no way the under-developed country.

Don't see the innovation with Ad Words: as _every_ small company can use it, you fight towards the bottom and sometimes against cowards instead for quality which an independent non-ad-financed search engine would much better reveal.

This may be the result of good search and Sturgeon's law. https://en.wikipedia.org/wiki/Sturgeon%27s_law

If so, the real problem is that Google search is incapable of identifying content by quality. As a result, the more Google searches, the more crap it finds, and the worse the results become.

Refutations of this idle hypothesis welcome ;-)

If guelo's argument that Google not being in China fostered more tech companies in China is correct, then removing an initially dominant foreign company with big first mover advantage and economies of scale can actually increase competition in the market.

That said, once the home grown companies are sufficiently mature to compete on a level playing field with already established companies I agree the protectionism should be withdrawn again

Look at Russia. They don't have Chinese-style technical or political protections to keep Google out, yet the market is dominated by local players like Yandex and Mail.ru.

Obviously the Russian government exerts control over Google's Russian operation, but it's not explicit like in China. This has meant Google can continue to operate in Russia without losing face ("do no evil" and all that), whereas it wasn't possible in China.

Your link is about the Russian trade embargo, which is not directly relevant... But it does illustrate the huge difference between Chinese and Russian trade politics. China keeps tight reins internally on content and communications, but wants to ensure the free flow of material imports and exports.

China wouldn't allow an external political disagreement to disturb relations to the extent that Western imports would be banned. At least I can't imagine French cheese being burned by the tonnes in Shanghai...

Any attempt by Europe to try that, would destroy the European economy. Germany is hyper dependent on exports. The US eats most of its own dog food when it comes to manufacturing, Germany does not. Nearly all of Europe, other than Russia and perhaps Norway, lacks the ability to be truly energy independent today. It's obvious who would win the import / export restriction war.

There's one country capable of being fully self-sustaining across science, innovation, manufacturing, natural resources, technology - that's the US. Europe has barely shown an ability to cooperate even in a poorly functioning manner when it comes to integration, much less of the extreme integration such a command economy system would require. Even the Eurozone experiment has been a disaster for the majority of countries involved. There's no possibility of the kind of extreme integration the kick-the-Americans-out plan would require, ever happening.

Kick the Americans out? Ok, well now BMW, Porsche, and Mercedes are banned in the US. Germany just lost a huge part of its economy (look up the two biggest markets for their vehicles: the US and China).

As someone living in a German city which is a world leading car manufacturing center, I would actually like to see the end of German auto industry. The whole German economic system is geared towards those big car manufacturers, and it's very hard for small businesses and enterpreneurs to navigate through all of that bureaucratic mess created by big German corporations. Letting them fail would actually help making German economy much healthier in the long run.

I am not even sure, that Silicon Valley is ahead when it comes to "digital stuff" inside cars. It is my perception at least, that companies like Mercedes or BMW had many of the digital helpers first. I therefor think Germany would be a great place to start a tech-startup apart from the next social network.

You mean besides the extreme bureaucracy, poor funding opportunities, poor exit opportunities.

Germany is probably one of the WORST places for a start-up.

As someone doing business in Germany since the age of 17, I would actually like to know, what you mean by that. Of course employment works different here (like generally in Europe), and I also give you that it is much harder for non-Germans, but if you know the language you can generally just call the folks at our IRS and they are happy to help you.

Starting to freelance is literally just filling out a one page online form at the Gewerbeamt, after that do not call them, they call you.

Setting up an entity is a bid harder, but come on, registering an UG or a LTD (in the UK, this is Europe after all, you can register your company pretty much where you want to) is not black magic either. It could be easier, but I do not buy that we are missing opportunities, because you have to google it first.

> poor funding opportunities, poor exit opportunities.

>Germany is probably one of the WORST places for a start-up.

I give you lacking funding opportunity, but the notion seems to be, that early stage funding is pretty okay, mid and later stage rounds seem to be the problem. We do have an exchange in Frankfurt and car companies are buying startups in their space, the problem is more, that there simply are not that many of them.

There is also the possibility to join Rocket, their E-commerce and (locale) marketplaces seem to do just fine, funding-wise.

I think we are pretty okay, even without the short-lived social stuff, that SV creates, which some people call a scheme anyway. What I would like to see more of are SaaS products in many different spaces. I do not think that missing funding or a bureaucracy are the reasons why we do not have more of them. I think the reasons are rooted deeper in society, which is slowly changing over time, thanks David Fincher.

Also: Compared to what? SV or the 192 other countries that exists besides Germany and America?

    Denmark      4
    France      46
    Germany     62
    Italy       77
    Netherlands 10
    Spain       71
    Sweden      29
    Japan       94
    Korea       83

    US          15
    Canada     -73
    Mexico     -19

http://www.eia.gov/dnav/pet/pet_move_wkly_dc_nus-z00_mbblpd_...

Yes but not because some EU bureaucrats have been born with some innate fetish for free trade. It's because the EU is easily influenced by deep pockets.

Protectionism is how every nation on the planet developed. Why are Americans driving South Korean/Japanese cars and not the other way around? Because the south koreans and the japanese imposed large tariffs on car imports and the US did not. Their car companies had free range on their own turf. Which gave them time and money to develop.

Silicon valley is not giving the outside world any chance of competing.

The reason that the Americans are driving Japanese cars is that they were built in the US (which happens because of the protectionism). Ford doesn't build cars in Japan. The end result is good for most people (consumers get more choice, jobs are still in the country).

Once the major players from hyper-competitive markets inevitably enter the protected market, then they outperform the resident industry there. Protectionism props up non-competitive markets, which is disruptive for citizens when they fall down.

The auto industry might not be the best place for where you want to apply protectionism. But one pretty good usage is when the local industry is in its infancy.

It's pretty well accepted that the IMF forcing so many African countries to drop agriculture-related tariffs has been among the biggest failures of modern economics.

They care about consumer freedom, that's why. What you are implying is that competition can never work and that people with a head start should be regulated away.

It screws the consumer and there is no proof it works best in the long run. France is super protectionist but they aren't doing so well. In many cases, it just has knock on effects that make other industries uncompetitive. Can't buy the best engines, therefore we can't compete in any market that requires good engines, etc.

The fact is that we live in a kafkan place where everybody seems to think that letting consumers choose what they want to buy hurts them, that delivering goods make a country rich, but receiving payment makes it poorer, and that a government picking winners on every market is the best way to ensure competition.

You'll certainly see several protectionist policies at the US, what is extremely annoying, because they claim to be a completely open country. But the US is still one of the less protectionist ones.

From the Word Bank data, there were 40 countries with lower median tariffs than the US, 4 tied with it, 71 with higher tariffs, and 98 without data in 2013.

Between the countries with lower tariffs there are extremely rich ones, fiscal paradises, EU countries (that have zero tariffs between themselves), and 4 poor ones.

Between the countries with higher tariffs there are basically the poor countries, and Australia. I don't think I've seen any other rich country there.

So, yes, the US is within the countries with lower tariffs. But also yes, every other country that you'll think of has probably lower tariffs than you.

You must be joking. Countries with open markets develop way faster than protectionist countries. If mercantilism is so good then why are the Asian Tigers doing so well and communist countries doing so bad?

It would be nice if at least one such country could just blatantly state their motives up front to be judged on their merits: "We're choosing to prohibit a non-local company to encourage local replacements."

There are local monopolies everywhere, even in the USA. And they are protected by the local (city, county, state, federal) legislation that favors local business. Just try coming out of nowhere and starting new water supply business somewhere in Texas (constructed example, but point stays).

Nobody prevents you from buying local right now, so that's a red herring. If you want to force others to do the same, you should pay their increase as well. Are you prepared to do that?

That's what governments and elections are for. People vote, government make it more complicated for foreign companies to compete on the local market. People pay a bit more for for a bit worse service, and tax rate for everyone gets lower because of reduced unemployment benefits and increased tax income. Everyone locally gets it a bit better.

I'm not saying that one or the other option is clearly better. There are many ways in which "fully open", "fully closed" and "somewhere in between" policies can fail or succeed. It's always matter of balance, but favouring local companies is not bad per se.

When I go to vote, I vote for the government and policies that will make my life and life of the members of my community better, not the government that would make the world better in total by making it a bit worse for us. It doesn't work that way.

Forcing others who disagree with you to go along, yes. That's a very big hammer, and should not be applied lightly. (I'm not saying it should never be applied at all; there are fundamental aspects of society that only seem to work with that pressure applied.)

> People pay a bit more for for a bit worse service, and tax rate for everyone gets lower because of reduced unemployment benefits and increased tax income. Everyone locally gets it a bit better.

"a bit worse" is downplaying it quite a bit; sometimes the result is quite a lot worse. And when you're talking about services with network effects, sometimes the result is "fundamentally not the same service at all". If you're stopping people from participating in the same Internet as everyone else, you could just as easily be slowing your own local economy and breaking opportunities for them to create the next service that'll actually be the best for everyone. And unless you're prepared to make your country completely self-sufficient with no reliance on the outside world, "increased tax income" isn't going to help you when it turns out the services people actually want aren't made in your country and never can be.

As an alternative to dragging others down, if you really want to spend a pile of money boosting your local economy, and you want to do that via government, how about supporting local businesses as they improve, and encouraging them to compete with services provided elsewhere? "Keep up" is always better than "wait up".

What is wrong with that is that a local company will have to base their offerings on subpar components, and won't be able to compete externally.

Everyone wants the benefits of protectionism on their own turf without paying the price of everyone else being protectionist and that at a minimum requires pretending you're not being protectionist.

foreign company tax avoidance?

"Technology giant Google last year paid $11.7 million in corp­orate tax to Australian government coffers, on revenue of $438.7m and profits of $58m." ~ http://www.theaustralian.com.au/business/media/google-admits...

I think we, as technologically included people, tend to overestimate how old the internet is to most people outside of maybe early email usage.

Also the implosion of companies (like Yahoo) is a factor here. If Yahoo hadn't been really stupid they would still be dominant - and it would have been hard to stop them.

Of course people can overtake when the leader throws the lead... but it's luck and also hard.

MySpace vs Facebook happened after Google rose to dominance.

Also, Google Video vs YouTube.

I think you forget just how FAST Google blew up. In 1999 they were basically nothing - by 2004 they were the largest search company on the internet.

Facebook wasn't even a thing until 2004 - after the Google IPO. So no, Myspace vs Facebook didn't happen after that.

Also Google Video was just plain crap. It's like comparing Google+ to Facebook, it was never going to last.

Remember though that accurate results is a clear market winning feature - we've seen that the average user quite simply doesn't care about privacy that much.

For example, during the mobile apps gold rush. I had a finished Android app ready to go for almost a year waiting for the "Android Market" (Now the "Play Store") to allow Canadian sellers. I could not sell even in my own country (at least not with any visibility) while my American competitors could accumulate a huge head start. I had to wait for Google to jump through the Canadian regulatory hoops to allow Canadian sellers into their store. It was frustrating as hell.

The other problem is that new technologies often evolve from an ecosystem of other new technologies. If we only have late access to Netflix or Uber or self driving cars, it becomes difficult to be competitive in the technologies surrounding these technological shifts. If you're last to experience newer technologies on a daily basis, you're also last in a position to evaluate and predict where they are going which gives you a significant business disadvantage.

In order to build on top of the leading edge you have to have good access to the leading edge wherever it may originate from.

How? Great firewall of Europe? Or what exactly are you proposing?

On the other hand, the article indicates that Microsoft is quite active in the whole investigation, and they're not exactly a European company either...

Forcing them to follow basic rules of fairness is usually enough to keep them out.

Frankly, it wouldn't be that surprising if net neutrality started getting violated in Europe by protectionism laws.

However, if we granted more fairness to the companies, we wouldn't have more or better companies. We'd just be invaded by huge US companies, because they're just better and move faster. So, yes, we have to start with smaller actors who just rely on the openness of the markets of dominant actors: We couldn't build Apple but we rely on their Appstore to have fair rules, we couldn't build Amazon EC2 but our companies rely on the openness of the EC2 service, we couldn't build Windows but we rely on Microsoft publishing its API. And this API documentation is exactly the subject of the $2bn fine that Microsoft received from EU in 2003.

I'm sorry, perhaps US performs too well, but we need open APIs in Europe. From the fines I've seen, the decisions aren't generic protectionism, they're focused on keeping free market so we can have some local startups too.

As for the issue at hand (YT being slow), like a sibling post states, that's because they refuse to peer at DECIX where everybody else is. They even tried to frame the NSA scandals as "IT companies, be responsible, keep user data in German networks and peer with us directly (on our terms, which will be expensive for you - they 'forgot' to mention that in the press releases)".

The best way to make DTAG more customer friendly (both upstream and downstream) is to move somewhere else.

Luckily in cities you have 5+ ISPs to choose from (some of them DTAG resellers, but still an improvement), and even on the country side it's typically at least 3.

ALL traffic from DTAG users first runs to a Level3 datacenter in New York, and from there goes to other users.

While all other German ISPs have a peering node at DECIX

(TAT-14 is a transatlantic cable owned by DTAG and Telia)

It’s common knowledge in the industry by now that the DTAG uses their 40 million users as leverage to force companies to directly peer with them (and pay for peering).

My two cents:

1. Baidu has more market share than Google before Google left. 2. Google's chinese processing was bad before Kaifulee, but now Google's Chinese NLP is way better than rest of the world.

If the EU, or UK want to improve their tech chops, they should allocate more resources to the brightest of their respective populations.

If the UK scrapped the war on drugs and gave the billions which are saved/earned through taxation to people who tested as high IQ (say > 139) to invest in STEM activities, what would happen?

I'm not in the set of high-IQ individuals which I propose giving additional resources to; but it's clear in a positive sum game I would benefit greatly from their invention (creation of new products/services) and innovation (improvements of current products/services).

Unfortunately, there's a recent fetish for equal outcome for all (vs. even equal opportunity). As soon as there's equal output from all: that'll makes sense!

I'm tired of Anti-American sentiment when your governments are in bed with ours. American companies weren't the only ones sharing data. German and Belgium telecoms were in bed with spy agencies and not just with the Five Eyes. In public Merkle was outraged but her spy agency was just as much to blame.

This is a global problem not just a U.S. and EU one.

Anytime someone wants to kick me out I take offense. He's talking about kicking out all American companies and making their own tools as a replacement. How is that not Anti-American?

These are not NSA issues its a global issue. What are the ROE for cyber attacks? There are much deeper issues beside the NSA reading my gmail, which I dont mind.

What I do mind is undermining technologies that are supposed to protect us from 3rd parties (criminals and governments alike).

Absolutely a huge concern going forward but right now they don't have anywhere near the reach of the US.

> Or the internet propaganda firms in Russia?

On a completely different scale from the US.

> The UK arguably

Their domestic spying is just as atrocious but internationally they are just tools of the NSA.

When one actor is 10x the size of all other actors combined globally it isn't out of line to put the majority of the scrutiny on them and the companies they have deep influence on.

That's an awesome troll factory slogan.