Why do US tech companies honor rulings by the EU when they don't have jurisdiction?

  • Why don't they just ignore the EU laws such as 'right to be forgotten', or 'cookies laws', or 'privacy', or 'competition', or even collecting VAT. It's not like the EU will block the domain name. Google has done that with China when China ordered it to censor certain web site. Google decided it wasn't worth the trouble to be bullied by the Chinese government so it pulled out and ignored them.

    Google's China domain, Google.cn, now redirects to Google.com.hk. The new site reads, "Welcome to the new home of Google China search." The switch means Google is no longer censoring search results for its Chinese visitors. Whether Chinese Internet can actually access Google.com.hk is another matter. It may be blocked by the Chinese government. The move follows months of negotiations and threats between Google (GOOG) and the Chinese government.

    Why/when don't/will they do the same thing for the EU?

    `It's not like the EU will block the domain name` that assumption is untrue in general, as many owners of gambling and torrent sites know firsthand.

    In addition to the excellent answers you already had, ignoring privacy laws may backfires: if US medias decide to make this topic known to the US audience, the US customer may lose their trust in those companies.

    @Taladris It's pretty obvious US people don't care about privacy. How could warrantless wiretapping survive so long?

  • Brythan

    Brythan Correct answer

    4 years ago

    If the companies ignore the laws of the European Union (EU), then the EU can fine them. The United States (US) may refuse to collect on the fines, but even so, the example company is doing business in the EU.

    Amazon.co.uk, Amazon.fr, and Amazon.de collect money in the EU via credit cards. Those credit cards bill EU banks. The EU can of course prevent money from being taken out of EU banks. Similarly, Google, Facebook, etc. sell advertising to EU customers. Again, the EU can block that money from reaching them. And of course, those companies have operations in the EU. The EU could close those operations.

    In theory, a company could be 100% US with no EU income and ignore the EU rules. But such a company also has no need to provide service in the EU. Because if it can't sell products or advertising in the EU, why does it need to be there? Transnational corporate advertising? Hint: those companies do business in the EU and are accessible to EU sanctions.

    And of course, that's all assuming that the US does not collect on the fines. The US might collect the fine for the EU. After all, it may want to collect a fine against an EU company some day. In fact, there may already be treaties covering that exact issue.

    Talking about the possibilities, big corps typically also have branches in Europe, at the very least they have computer centers in Europe for their servers to provide fast services, if they fail to pay, the EU (or individual countries) could also close/confiscate those.

    I like this answer better because it explains the actual leverage the EU has over a foreign company. If the EU has control over EU banks, then I suppose they can prevent money going to a foreign company. I don't really see a need for a local office since most of the companies are virtual and merely data centers that can exist anywhere. It's the money that matters. I suppose if bitcoin caught on, then the EU would have no leverage except for blocking and censorship.

    @Chloe: "data centers that can exist anywhere" - I don't think that is necessarily the case, given that privacy laws impose some restrictions on where person-related data gets stored by companies.

    Note that Wikipedia's servers and employees are exclusively located in the US, and they quite explicitly do not comply with any other country's copyright laws.

    @Chloe You might not “see” it but that's just the way it is. Even without considering companies delivering actual physical products (Amazon), the location of data centres or design teams, the fact is that Google, Airbnb, Facebook, eBay, Uber, etc. all have and *need* significant presence somewhere in Europe to handle sales, customers support, etc. The European market is too important and competitive to be neglected or managed completely from the US, just like the US market is too big for European banks to ignore completely.

    Global companies can ignore smaller countries or even make a choice not to go along with China but they have to contend with regulators in at least two major regions of the world, sometimes more. It's just as true for Internet-focused companies. (+1 to the answer btw)

    Great answer - it's also worth considering the point that the EU has rules which can prevent the use of services which don't comply with these rules (example: GDPR) and thus if the US companies don't comply with these measures they effectively lose their EU customer base.

    @Kevin quite unfortunately that's not strictly true. National Wikipedia's often do comply with their country's copyright laws, e.g. Czech Wikipedia follows the Czech law in this regard.

    @JonathanReez: Even Commons doesn't always follow local law) (although they usually do). But regardless, any images which Commons won't take can just be uploaded directly to the English Wikipedia, at which point they are publicly available anywhere in the world (at least, to English-speakers plus people who can figure the site's navigation out by trial and error).

    @Kevin yes but Czech articles are not allowed to use photos which violate Czech copyright laws.

    @JonathanReez: That's beside the point. The Wikimedia Foundation (which hosts both the English and the Czech Wikipedias) is violating local Czech law by making the English Wikipedia available to people in the Czech Republic.

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Content dated before 7/24/2021 11:53 AM