4 ms·

How do you ensure that a company doesn't become liable for more damage than they can afford to repair, though? Maybe nationalization isn't the answer, but with

• inetknght 9y ago
  Why should we ensure that a company doesn't become liable for more damage than they can afford to repair? The implication there is that the company has a right to exist. If they're so grossly negligent, why should they have a right to exist? I don't know anyone outside of high finance who had a good opinion of Equifax before the breach was announced. Their recent hardships has certainly not helped that. For myself, I definitely think that companies and their officers should absolutely be liable for negligence.
  • sp332 9y ago
    Because they're not going to be able to pay back the damage they did. If they screw over a hundred million people and then go bankrupt, those hundred million people are stuck with the bill.
    • Applejinx 9y ago
      And if they continue to operate and continue to screw people over, what's the cost of that? It's not like they're benefitting anybody (not 'people' anybody).
      • paulgb 9y ago
        The problem isn't that they're allowed to go bankrupt, it's that they're allowed to make bets with huge downside risk knowing that if they lose the bet they don't bare the cost.
        • keganunderwood 9y ago
          What about when an SV darling company offers "lifetime" product and sells itself to another SV darling? I'm of course talking about joyent but it could be me next time. If we get rid of limited liability, do I become liable for BP's oil spills because I have own a few cents worth of petroleum stock through vanguard? I like your idea that companies should be able to bear the cost of a possible future liability. I don't know how we can implement it besides some form of insurance (like sometime else said a $10 fine per person per breach but I'd up it to (2000 * minimum wage per hour) for every incident per person. At some point though we will need criminal charges for negligence or worse attempts of cover up (Equifax). We need to make it easier to convict CEOs and the board to put them in prison in case of attempted cover up or non disclosure.
          • colorint 9y ago
            The global financial crisis showed that insurance isn't the answer. The problem with "hedging against all futures" is that the hedging is part of the system, and when the hedge grows to the scale of the thing being hedged, you have to start asking how you hedge the hedge (and so forth). That is, if Equifax can't pay out for a sufficiently large mistake, why would you expect their insurer to be able to do so? And, worse, what if the insurer is "too big to fail," so instead you just have the public serve as the backstop? Hence I think your latter point is right, executives really need to be more criminally liable. It's hardly unheard of, even if Ken Lay died before sentencing.
            • sp332 9y ago
              I would put it the other way: if you can't afford insurance to cover the potential damage you're doing, then you're not allowed to do it. And I don't mean unforseeable events, I mean something obvious about your business, like creating a single giant repository of data about other people and then not securing it. Of course the hackers are directly responsible for the damage, but Equifax's negligence sure didn't help. Maybe a fractional multiplier for sharing responsibility.
              • 9y ago
  • dredmorbius 9y ago
    If a company can take actions for which risks accrue to third parties, without any capacity for the company or its beneficiaries (stockholders, creditors, officers, etc.) to bear the consequences of those risks themselves then what you've created is one giant risk-transfer mechanism. In the case of information disclosure risks, the parties for whom that information concerns often have little or no say in the actions which have direct bearing on them. That's they "why not". It's not the company, it's everyone else.
• Shivetya 9y ago
  how are we so quick to excuse companies that would provide credit without validating who is actually applying? the danger with the Equifax exposure is the lack of safeguards companies using the information apply. just because someone gets my information by no means any company should accept a credit application, especially those outside of the area where the person has residence. It is this lack of safeguards that we should take issue with. Those issuing credit should always be liable for any loss.
  • deleted 9y ago
    [deleted]
  • harikb 9y ago
    This is not just about "credit". There is a lot more damage caused by the leak of untold amount of information about you. Wait till someone stars social engineering attacks against other sites based on revealed data.
• cmiles74 9y ago
  It's not the public's responsibility to ensure that companies don't over-extend themselves. When they do, they go out of business; this is how the market should work, in my opinion.
  • scott_s 9y ago
    That is not paulgb's concern, as I understand it. That is, paulgb is not concerned with the company itself, but rather its ability to undo harms to others. Companies going out of business doesn't correct the harm done to society.
    • cmiles74 9y ago
      I see what your saying, but that also seems like the market at work. If the harm done to society is sufficiently large, perhaps at that point society might decide create a government entity to meet the need... I do think that the company's failure and the infliction of harm on society is an important part of the feedback loop; I'm not sure we should be trying to prevent that (I mean, harm in terms of dollars or time lost, etc.)