$5 bil in GDPR regulation expenses? The hell is that? It might cost them $5 million to surge up personnel to make the necessary software changes to comply with GDPR regulation. Once done, fire those personnel and back to normal. At least from a operating expense standpoint.
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Tech Giants Set to Face 3% Tax on Revenue under New EU Plan
- Thread starter Megalith
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$5 bil in GDPR regulation expenses? The hell is that? It might cost them $5 million to surge up personnel to make the necessary software changes to comply with GDPR regulation. Once done, fire those personnel and back to normal. At least from a operating expense standpoint.
Well, a couple things:
-Obviously if taxation is so high it exceeds profitability, then of course a company will pull out of a region and stop selling there. I'm not sure when the last time that happened to a major corporation. I think it's the exception much more than the rule.
-These are tech companies we're talking about, which have less production costs compared to something like cars. The CEO of Amazon is literally the richest man in the world. I think they might still find ways to keep the lights on even with a different tax margin.
-Chrysler of course is vulnerable to changes in revenue, considering how they went bankrupt in 2009, but got bailed out by the tax payers and continue to operate. You talk about economic lessons, THAT'S the one to learn here. If you're big enough, win, lose, or draw, companies keep making money, even when they don't.
Gideon
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Amazon is a online retailer and their profit margins are slim, they have found creative ways of increasing it tho like Amazon prime and most of Bezos value is in stock worth of Amazon. That kind of taxation is punishing and really not worth it, GM had to learn that the hard way when they had to sell off Opel at a huge loss cause it was a major drain on their finances.
Chrysler was forced through Bankruptcy by the government and given assured loans which have been repaid now several years ago. Why were they rescued along with GM you say? If they went away many companies would have went bankrupt as well cause they have product no one can buy due to 2/3rds of their business being gone which means supply costs skyrocket and they go bust and millions of people lose their jobs and we have a depression instead of a recession. Chrysler was also looted by Daimler a German company that siphoned off billions in cash and dropped it as soon as the economy got sour. There is quite a bit more to it but I dont want to drag this conversation way off topic.
sfsuphysics
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Here's what's going to happen with Amazon, they simply increase the cost of everything, from goods to streaming services to cloud solutions, to people who have an IP in the EU by 3.1% people and every checkout has a basically has a "VAT" addition that deals with this, in addition any sort of add revenue of EU ads get increased costs, while probably getting more spammy because now they need to do more ads to deal with companies wanting to pay the higher cost. Now this is the good solution, the bad solution is that EVERYONE pays an increase in everything simply because the EU wants its precious 3% of revenue bullshit.
Country just do not know how to deal with the fucking realities of globalization, they think treating an entity that has a world wide presence yet effectively no where (except where a HQ is) is the same as a business operating within it's borders. If someone overseas buys something from NewEgg would they demand that NewEgg collect taxes on it? No. Again they slap a VAT on imported goods and call it a day, and everyone in the EU ends up paying more, but they don't demand that NewEgg give a portion of its revenue to some random EU entity.
dgingeri
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Have you even read about what's required for GDPR? It's insane, and it would require personnel for dealing with audits and making sure everything stays secure and compliant, kind of like SOX here in the US. My last company, with a revenue of just under $13 million in revenue and $1 million in profit in 2016, spent over $1.5 million on personnel and audits for SOX alone, and that doesn't include the hours spent by IT doing annual inventories. (I spent about 3 weeks of 30+ hours each week doing that stupid inventory.) I would not doubt it could cost companies a good 10% of their revenues to secure to GDPR mandated standards.
The entire purpose of taxes is to fund the government. As soon as you attempt to use it for anything else, you just create more problems than you solve.
The purpose of money is to allow people to exchange/trade wealth in a fair and unbiased way. So if I create something from my labor that is worth X amount of money, I can exchange it for something of the same value that someone else has produced. The market (what other people are wiling to pay) decides what value to place on your labor. While this is not a prefect system, it is still much better than one where a few people at the top get to make that decision.
Yes and you're comparing apples to oranges. Your company has personnel doing things, companies like Amazon, Facebook, etc are using AI and other computer programs to do such labor. They simply need to surge up personnel to make the necessary changes to get their programs to do the inventory. If they haven't already been doing it to begin with.
Really, the only thing I see them needing to do is make it so data doesn't replicate outside of EU and create a way for customers to be able to view/delete their data. Whatever those arbitrary crap it is in GDPR.
Oldschool and IT like, shouldn't want them to delete their data, that's been easy enough alone with hardware failure. They need to have that Backup mind and never dread being totally dark. Gonna take that for granted and wait till the lost minute then you aint gonna have shit lol.
dgingeri
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In order to be GDPR compliant, they need to have controls in place to check all data access changes so that they can ensure that those changes don't open up security vulnerabilities or expose data directly. This takes massive manpower. It also has to stay in place, not just contracted work, because changes are always ongoing in IT. To have these controls in place, many companies have to actually change the way they do things in IT entirely. It adds massive amounts of virtual paperwork in that changes have to be logged, explained, looked over by security personnel, and approved by security and management. To not be complaint in this brings massive fines. It is a very heavy burden.
This is EXACTLY what SOX has for requirements for changes in accounting. They have to have people that confirm that all equipment coming in and going out have to be tracked in the inventory so that everything in the records exists in the company and vice versa. To not be compliant in this can mean massive fines. These onerous regulations mandate a way companies do business on an ongoing basis, not just a one time thing.
Apples and oranges may be different in basic form, but they're both fruit, they're both picked manually, and they both grow on trees, so they have to be treated in a very similar way. (Thanks for that turn of phrase, it actually turns it in my favor.) From a farmer's point of view, apples and oranges are very similar. In that same way, SOX and GDPR are government regulations on the way businesses do things, and therefore are treated the same way.
In both cases, there are definitely better ways to do things, and certain things definitely do not need to be tracked, but because the government mandates that they HAVE to be done that way, and no other way, no matter if it is more effective, then the company gets fined. That is oppressive behavior by the government.
And these large companies already have their own backup plans in place. That really doesn't need to change.
And if you ask these companies directly the cost, they already stated the costs. A few million dollars. Companies like Facebook, Amazon, Google, etc already have processes in place to easily meet GDPR, they simply need to change the software to meet it. Which many of them have already done so.
The cost to meet GDPR compliance isn't as high as you think. It's a drop in the bucket. All data is gathered and it's tracked/logged automatically. It's when the data gets sold off, does it have actual personnel doing work. Which is already in place. No real change there. What changes is the fact that they have to inform customers about what really goes on with their data, which of course is just having some new legal lingo written out and put on an FAQ page.
Yes, all this is going to be a heavy burden, for some small non-IT companies who aren't use to dealing with constant changing regulations all over the world.
What GDPR really does for large companies like Facebook, Google, Amazon, etc is the possibility of losing revenue. User data is worth money and giving the user the ability to opt-out can leave to massive loss of revenue.
Apples and oranges aren't grown in the same regions. They aren't grown the same way. They bear fruit at different times. Even when you manually pick them, the process of picking them isn't the same way. The only similarities between them is "grows on trees" and "is a fruit." Might as well compare a banana, apple, and orange and say they're the same cause they're both fruit, picked manually, and grow on trees.
On the one hand I think taxes on revenue is stupid as hell BUT on the other hand...
Play stupid games and get stupid prizes, right?
If the tech giants want to play tax games by making Profit - IP licensing costs = no taxes then I think they can expect to get slapped for it.
Play stupid games and get stupid prizes, right?
If the tech giants want to play tax games by making Profit - IP licensing costs = no taxes then I think they can expect to get slapped for it.