Big Tech Turns in Croatia The State does not See a Single Kuna of Taxes

As these amounts grow, the practice of technology giants the EU has set out to bring order to the GDPR market, and most of the new European rules have two main ambitions – to implement a greater duty of care in controlling Internet content and to limit the market power of large platforms to create and maintain room for competitors.

The Croatian Chamber of Commerce held a webinar to discuss the legislative changes necessary due to the global dominance of large technology companies, and the consequences it has. They remind that some countries in the European Union have already started with the introduction of the digital tax and that similar efforts are visible at the level of the Union itself.

The press release: “Small children are a small problem, big children are a big problem, so are large technology companies. While they were in development, they were innovative and fascinating, but now they are becoming too big, so we as a society and the market must pay attention to them and regulate them,” he said. Petar Pavic, digital marketing expert and vice president of the Marketing Association of the Croatian Chamber of Commerce, at the introduction to the webinar “Market and legislative changes caused by the global dominance of big tech companies.” Today, five leading technology companies are worth $ 7.5 trillion, which is more than GDP). and Japan ($ 5 trillion) Their combined market value grew over 50 percent in 2020, with Facebook alone making $ 29 billion in profits last year, almost entirely through advertising.These figures clearly show the power of technology companies and their immeasurable impact on the marketing market. ”Today, we focus our discussions primarily on technology giants, primarily Google and Facebook, which have based their growth on innovation and, but at one point in that growth they entered a phase of non-transparency and market monopolization through acquisitions in some segments. The laws that should regulate them were written at the time of the railway development and it is long overdue for them to be modernized “, Pavic emphasized, and compared the big tech companies to Castro, saying that they are absolutely responsible for the digital revolution, but after only ten years usurped all power. “They have brought us a lot of good – democratized access to technology and knowledge, inspired many young innovators and entrepreneurs, but we still have to criticize the negative aspects of their growth such as monopolies, stifling competition, non-transparent use of user data, tax evasion and policy impact.” said Pavić, referring to their influence on the media, which is becoming too great.

“The ecosystem of companies that produce content and news on the Internet is completely dependent on two platforms – Google and Facebook because most of their revenue and traffic comes through them. That is why today, after the implementation of the new Copyright Law, publishers, often with the support of the authorities, start negotiations with Google, “he said, explaining in more detail the model of tax evasion of technology companies on a global and local level. “For example, a brand or company from Croatia buys advertising space on the Croatian media, but since the money passes through the Google system registered in Ireland, the Croatian state does not see a single kuna in the tax transaction from the entire transaction. On the other hand, the brand doesn’t know how much of its money ended up with the inventory retailer, and the medium doesn’t know at what price Google sold its inventory to the brand. The problem is that the current tax laws do not recognize a virtual place as evidence of the territory where the sale takes place, although it is undoubtedly clear that the portal whose domain ends with the extension .hr and which displays content in Croatian, is located in Croatia, “he explained. Pavic, noting that the EU is trying to solve this problem with new regulations. He also briefly described what happens “under the hood” in the process of online advertising. “If you want to advertise on Youtube, Gmail and be visible on Google, you can’t avoid Google Ads. Google will share the data your visitors share through these platforms, which maximizes reach, and you can target people around the world through their global ad exchange. But there are lawsuits against Google on charges of manipulating the stock market. All of us in the profession know that we must have an ad server, of course it is best to take Google, because if you choose another, some magic formula will drop your revenue by up to 30 percent. So, the very fact that you went to the competition, you lose revenue, and through these advertising systems Google earns 100 billion dollars a year, for the Croatian market, including Facebook, about 20 million a year, “Pavic elaborated. As these amounts grow, the practice of technology giants is becoming increasingly unacceptable to regulators. Therefore, the EU has set out to bring order to the GDPR market, and most of the new European rules have two main ambitions – to implement a greater duty of care in controlling Internet content and to limit the market power of large platforms to create and maintain room for competitors. Some countries, independent of the EU, have already introduced a digital tax aimed at technology giants. These are steps in the right direction, although the question is to what extent the laws will succeed in following the business models of technology companies that are always a few steps ahead of regulators.

Pavic finally summarized what companies need to do to get the most out of technology they can’t avoid, without over-compromising the integrity and privacy of users. “Your data is the greatest value you have, so you have to learn to use and understand it. Taking care of them is the norm of civilization – on a private and business level. We need to work with the digital tools available to us because they are ingenious, but we don’t need to use them unconditionally. Micro-companies are ‘doomed’ to big-tech tools, that’s the reality, but larger companies can and must invest in technology that is independent. The most important thing is not to indulge in inertia and not to allow the ease of use of technology in the younger generations to replace some basic knowledge of the profession, because it can be a path to ruin, “said Pavic, adding that the questionable business models will best reach innovative new generation practices. again bring disruption to the market. “As these children grew into big boys from the beginning of the story, who started to be a problem, so some new kids appear who will bring everything back into balance,” Pavic concluded.