[guiriduro]

Honestly how hard can it be given Microsoft size (and AWS, and Google's) to mandate the intervention of a EU corporate entity to manage their IP in the region, full source code, EU cloud assets, encryption keys, EU-only support access, collect their royalties etc., but essentially act as a privacy buffer wholly unanswerable to any US head office or any obligations US law holds the company to wrt any EU person, its just a black hole that grants them the right to earn money and hold a large market share in the EU. The Chinese aren't afraid to do it.

[dlgeek]

AWS is doing that: https://www.aboutamazon.eu/news/aws/built-operated-controlle...

[alephnerd]

This isn't due to coercive mandates as OP mentioned though.

[pabs3]

Why would you need a corporate entity? Just hire folks to manage data in open source software on open hardware located in government premises.

[alephnerd]

> Honestly how hard can it be given Microsoft size (and AWS, and Google's) to mandate the intervention of a EU corporate entity to manage

Very difficult.

Countries like Ireland, Poland, Czechia, Romania, and Bulgaria are heavily dependent on American FDI in their tech industry, and the European Council has final say and requires unanimity. A rule such as the one you mentioned would smother VC/PE in much of the EU, as European funds like Index Ventures and Munich Re Ventures are heavily dependent on the US to raise capital and build dealflow.

Major European employers like Volkswagen AG, Siemens AG, NXP, Phillips, Infineon, and others would also face severe retaliation as a result.

It would also set a precedent that would make an alternative like China extremely hesitant to invest, as the Chinese government heavily utilizes export controls on tech transfers. For example, BYD investment in Hungary is largely CDK with the core high value components like Batteries being manufactured in China. Biren, Huawei, and SMIC would face similar export controls.

[guiriduro]

Major Cloud providers would still need to invest eu-customer money in providing eu IT services, this is more a legal, security and privacy isolation for big tech players in order to maintain their share, extract royalties etc.

Startups that are not in a large marketshare situation wouldn't trigger the need for intermediary/isolation so the effect on FDI would be limited, and anyway, the tides are turning on US capital in general.

Retaliation: I'm not sure the US fiscal and legal overreach isn't already in place, e.g. VW dieselgate, export controls etc. The US looks after its interests (fair enough), but its time the EU levelled the field to protect its citizens, a small loss of regional sovereignty for those companies in exchange for the EU revenue they continue to make.

[alephnerd]

> Major Cloud providers would still need to invest eu-customer money in providing eu IT services, this is more a legal, security and privacy isolation for big tech players in order to maintain their share, extract royalties etc.

That's already done today with little-to-no acrimony, and none of the regulations you mentioned. Where do you think much of that FDI in Ireland, Poland, Czechia, Romania, and Bulgaria is coming from?

> Startups that are not in a large marketshare situation wouldn't trigger the need for intermediary/isolation so the effect on FDI would be limited, and anyway, the tides are turning on US capital in general

It's not just startups. American BigTech GCCs represent the bulk of tech related FDI in Czechia, Romania, Poland, and Bulgaria, and Ireland's US-friendly business law has lead to a severe dependency on the US for capital [1].

> the tides are turning on US capital in general.

American Capital markets continue to remain larger in size than the entire EU's combined [0]. And China's is roughly in size to the entire EU. An the reality is, European capital markets are nowhere near as unified as either the US or China's.

> its time the EU levelled the field to protect its citizens, a small loss of regional sovereignty for those companies in exchange for the EU revenue they continue to make

But how?

The EU isn't significantly unified, and depends on unanimity within the European Council. As I mentioned before, Ireland, Czechia, Romania, Bulgaria, and Poland would be a significant veto to any shift against the US.

Furthermore, French and German domestic giants continue to compete against each other in every industry, which has lead to cooperation failures such as the FCAS snafu recently [2].

There is no "EU grand strategy", as major member states like Germany, France, and others push back or compete with each other internally.

And given the fact that the Chinese players are cannibalizing European competitors within China, major European companies like Volkswagen and Siemens are now heavily dependent on the US as an alternative market.

[0] - https://www.sifma.org/wp-content/uploads/2023/07/2024-SIFMA-...

[1] - https://www.cso.ie/en/releasesandpublications/ep/p-fdi/forei...

[2] - https://on.ft.com/4n77YpQ

[jjani]

Korea has such a mandate and does just fine. Haven't seen a single instance of Korean employers such as Samsung suffering from retaliation over it.

[alephnerd]

Korea actually invested in building indigenous and domestic capacity in software and hardware since the 1990s, and rapidly expanded financing+subsidizes along with tech export promotion in the 2000s and 2010s while much of the EU fell under severe austerity and financialized much of it's R&D capacity. Furthermore, Korean companies like Samsung Group, LG Group, SK Group, and Hyundai Group spent tens of billions building R&D capacity and conducting tech transfers with American partners in order to build a much more balanced economic partnership.

Samsung Group, SK Group, LG Group, Hyundai Group, and Naver Group all built domestic capacity across both the software and hardware stack with Korea, and can decouple from the American ecosystem worst comes to worst because they have built a strong ecosystem across Japan, ASEAN, China, and India.

European countries never did the same. There is no domestic equivalent within Europe (and no, ASML does not count - all their bleeding were EUV work is done in the US via a JV with the DoE). In chips alone, Infineon, NXP (which is largely Motorola), and ST Micro are all heavily dependent on US capacity, and their niche in analog and power chips has largely been commodified by Asian players like Samsung Group, Hyundai Group, and SK Group. This can also be seen with CHIPS and IRA disbursements - Samsung and LG have been the biggest beneficiaries of the former and latter, and Naver has been leading US-SK trade negotiations with Trump Jr which lead to automotive being impacted but electronics largely unscathe.

South Korea also allows a level of market consolidation and oligopoly power that would violate European regulations.

Furthermore, SK can always dangle the China-SK-JP trilateral FTA to force the US into a more equal bargain, while dangling enhanced military cooperation with the US, Philippines, and Taiwan to force China to negotiate. The EU cannot offer the same because it is faced with Russia on it's eastern border, and thus cannot use China as a bulwark against the US.

Europe is decades behind Japan, South Korea, and Taiwan, let alone the US or China