Comment by clarionbell
10 days ago
Regulation and lack of capital. Just read the report from Mario Draghi if you don't believe me.
We have EU regulations, those are much tighter than in US, on practically every front. Labor, finance, environment, data, AI, you name it, we have it regulated. And then you have the country level regulations on top. That's right, EU sets the floor, not the ceiling.
Suppose you have a start up in Poland, you have managed to get funding and you are offering services in your country. You want to do that in Germany? Get ready for complying with new set of regulations. And you better hope that individual German states don't have something extra on top of those.
All of those regulations have purpose, it is possible that they were designed by well meaning people and bring some benefit. But their compound effect is catastrophic. It is not that you can't push trough, you can, just look at Kiwi or Mikrotik. But it's an uphill battle and your competition from overseas has it so much easier, that they can end up outgrowing you, and eventually buying you out.
What’s the point of regulations when you’re being bent over by US Tech? You can’t say there’s regulations and then give it all to a monopoly…
> You can’t say there’s regulations and then give it all to a monopoly…
Why? These are very closely intersecting things. It is very convenient for government to regulate and force monopolies to do what the government needs. And vice versa, strong regulation allows monopolies to avoid the emergence of new competitors. Win-win.
A lot of this is legacy holdovers from the Biden era.
Both the US, the EU, and the rest of the OECD began the process of aligning digital services taxation and regulation [0][1] under the Biden admin, as it was also a fig leaf tossed at the EU by the US to prevent a potential trade war with the EU [2] due to the IRA and CHIPS act.
The US has now removed itself from this OECD initiative, and most other major markets have begun to as well either due to US pressure or their own self interest. It also played a role in reducing Biden/Harris' chances in 2024, as much of the Obama era tech coalition shifted support and donations to the Trump-Vance campaign due to their support for repealing and fighting against digital services taxes globally.
The US also removed it's gloves when negotiating with the EU this admin compared to previous admins, so dangling the threat of retaliatory measures is not well received and can elicite a quasi-hard power response.
[0] - https://www.eiu.com/n/the-oecd-global-tax-deal-still-hangs-i...
[1] - https://www.oecd.org/en/topics/sub-issues/reallocation-of-ta...
[2] - https://www.nytimes.com/2022/12/06/business/dealbook/biden-c...