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Any cost that has a high fixed component and a lower variable component leads to increasing returns to scale for enterprises. We see with regulation all the ti

Any cost that has a high fixed component and a lower variable component leads to increasing returns to scale for enterprises. We see with regulation all the time, e.g. Dodd-Frank made it harder for small banks to raise capital.

supertrope 8y ago
Smaller firms can add "compliance officer" or "privacy officer" to the list of job duties someone does. But yes bigger firms can more easily afford bigger compliance/legal/auditing/lobbying departments.
- Matticus_Rex 8y ago
  That's the thing, though -- it doesn't scale like that. If a 100-person company has a DPO, you can't have someone who spends 20% of their time as a DPO in a 20-person company, because just keeping up with what you need to know takes a large amount of time.
  - Someone1234 8y ago
    Neither one needs a DPO. A DPO is a requirement for companies with 250 more more employees.
    - Matticus_Rex 8y ago
      I was using it as a stand-in for privacy officer (and the argument is true in either case), since the WP guidance has indicated that in many cases in smaller companies, they're treating a role that looks like a DPO as a DPO. There's also significant vagueness around what it means to be a large-scale processor (which also triggers the DPO requirement), and recent guidance suggests that a lot of companies that thought they didn't need a "DPO" really do need a DPO.
JumpCrisscross 8y ago
Most successful compliance regimes balance the need for regulation against incumbency bias by making the regulation more stringent for larger firms. Restaurants, for example. If GDPR had envisioned a €1 million global revenue floor for everything but the civil liability components, it would have been successful.
- PurpleBoxDragon 8y ago
  The GDPR seems to be been designed to do the opposite of this by imposing a maximum cap on fees that could total many multiples of revenue for a small business but which will never be greater than a 1/25 the revenue of a large business.
  - tscs37 8y ago
    Revenue is not profit or the money available to a business. 1/25th of revenue sounds small but if you have a profit margin of 30% that's already 13% of your profit just gone. At 10% margin it's 40% of your profit. I think large business still very much cares when 40% of annual profit just goes poof.
    - ryanwaggoner 8y ago
      Yes, but if you’re a small business, it could be 40,000% of your profit. Goodbye business, goodbye employees. Meanwhile the large company grudgingly pays their fine and rolls on.
      - tscs37 8y ago
        EU regulators don't do that, mostly because in the EU there is a right to a proportional punishment, meaning you must be able to pay it, atleast if you're a corporation. The EU has no interest in bankrupting anyone, there are guidelines setup by the EU for the regulators for this.
        ryanwaggoner 8y ago
AnthonyMouse 8y ago
> Any cost that has a high fixed component and a lower variable component leads to increasing returns to scale for enterprises. It's not just fixed costs. Any increase in overhead will have a higher impact on smaller businesses. If a variable cost increase is passed onto customers it results in lower sales volume. If it isn't it results in lower margins per unit. In either case it can push a smaller business past the point that it can no longer cover its fixed costs, even if the fixed cost amount hasn't changed.

supertrope 8y ago

Smaller firms can add "compliance officer" or "privacy officer" to the list of job duties someone does. But yes bigger firms can more easily afford bigger compliance/legal/auditing/lobbying departments.

Matticus_Rex 8y ago
That's the thing, though -- it doesn't scale like that. If a 100-person company has a DPO, you can't have someone who spends 20% of their time as a DPO in a 20-person company, because just keeping up with what you need to know takes a large amount of time.
- Someone1234 8y ago
  Neither one needs a DPO. A DPO is a requirement for companies with 250 more more employees.
  - Matticus_Rex 8y ago
    I was using it as a stand-in for privacy officer (and the argument is true in either case), since the WP guidance has indicated that in many cases in smaller companies, they're treating a role that looks like a DPO as a DPO. There's also significant vagueness around what it means to be a large-scale processor (which also triggers the DPO requirement), and recent guidance suggests that a lot of companies that thought they didn't need a "DPO" really do need a DPO.

JumpCrisscross 8y ago

Most successful compliance regimes balance the need for regulation against incumbency bias by making the regulation more stringent for larger firms. Restaurants, for example. If GDPR had envisioned a €1 million global revenue floor for everything but the civil liability components, it would have been successful.

PurpleBoxDragon 8y ago
The GDPR seems to be been designed to do the opposite of this by imposing a maximum cap on fees that could total many multiples of revenue for a small business but which will never be greater than a 1/25 the revenue of a large business.
- tscs37 8y ago
  Revenue is not profit or the money available to a business. 1/25th of revenue sounds small but if you have a profit margin of 30% that's already 13% of your profit just gone. At 10% margin it's 40% of your profit. I think large business still very much cares when 40% of annual profit just goes poof.
  - ryanwaggoner 8y ago
    Yes, but if you’re a small business, it could be 40,000% of your profit. Goodbye business, goodbye employees. Meanwhile the large company grudgingly pays their fine and rolls on.
    - tscs37 8y ago
      EU regulators don't do that, mostly because in the EU there is a right to a proportional punishment, meaning you must be able to pay it, atleast if you're a corporation. The EU has no interest in bankrupting anyone, there are guidelines setup by the EU for the regulators for this.
      - ryanwaggoner 8y ago

AnthonyMouse 8y ago

> Any cost that has a high fixed component and a lower variable component leads to increasing returns to scale for enterprises. It's not just fixed costs. Any increase in overhead will have a higher impact on smaller businesses. If a variable cost increase is passed onto customers it results in lower sales volume. If it isn't it results in lower margins per unit. In either case it can push a smaller business past the point that it can no longer cover its fixed costs, even if the fixed cost amount hasn't changed.