5 ms·

I was wondering where funds from such a fine go: "Fines imposed on companies found in breach of EU antitrust rules are paid into the general EU budget. This mo

I was wondering where funds from such a fine go: "Fines imposed on companies found in breach of EU antitrust rules are paid into the general EU budget. This money is not earmarked for particular expenses, but Member States' contributions to the EU budget for the following year are reduced accordingly. The fines therefore help to finance the EU and reduce the burden for taxpayers."

black_puppydog 8y ago
sounds reasonable to me. this way, you get a disincetive to break antitrust rules for google, while not opening up a fight for shares of the money by their competitors afterwards. EUR 1.5b (~$1.7b) is a nice sum to fight over, after all. edit: of course, how big the disincentive is is up for debate. :P
- zaarn 8y ago
  1.5b€ isn't a lot; Germany + France + UK = 5 Trillion (5,000 billion) as a sibling comment mentioned. They don't care about 1 billion here or there.
  - black_puppydog 8y ago
    It would be a lot for any one of Google's competitors to fight over. That is, if the money were e.g. supposed to go directly to the competitors that were harmed here, there would be a huge allocation fight within minutes of this decision...
    - zaarn 8y ago
      But it doesn't, it goes into the EU budget.
      - black_puppydog 8y ago
        exactly. so it sounds reasonable to me. what are debating again? :P
matt4077 8y ago
That happens to most fines, everywhere. In case this is in accusation of corrupt practices aimed to increase the EU budget, note: - Fines account for <5% of the EU's budget - The EU budget is relatively small compared to national governments' budgets. EU: 150 billion, Germany + France + UK = 5 Trillion (5,000 billion). That's leaving out 24 smaller economies. National governments have a lot of input in the decision-making process and couldn't care less about a billion here or there. Especially if it risks impacting perceived rule of law. - In any large bureaucracy, individual decision makers have incentive structure that often diverge fundamentally from those of the organisation as a whole. A prosecutor will have no financial or career advantage tied to the EU's finances. In this specific example, the commissioner responsible (Vestager) is somewhat likely to leave the commission after the May elections anyway, because of another pro-competition decision that was decidedly more important and not appreciated by France and Germany, namely prohibiting the Siemens and Alstom merger. If you sum up all the fines collected by continent, you will see that (a) EU companies pay fines roughly equivalent to their share of economic activity in the EU, (b) Asian companies pay comparatively more, and (c) US companies are actually fined far less than their share of the economy would suggest. The most likely explanation is that rather high standards of enforcement and corporate governance in the US require less EU intervention.
- rat9988 8y ago
  > The most likely explanation is that rather high standards of enforcement and corporate governance in the US require less EU intervention. Or maybe the american political influence is stronger?
  - matt4077 8y ago
    It would need to be stronger than EU member states' influence, which seems unlikely. I also don't remember ever hearing of even attempts to exert influence on these investigations. Note that such agency actions are firewalled from even their EU/US/national political leadership. Even if Trump managed to convince Merkel to intervene, she wouldn't really be able to. To illustrate with a reverse example: Imagine Macron trying to get to get to a judge in a California District Court. There are multiple layers in between where they would tend to consider the call a prank and hang up.
mtgx 8y ago
Where did you expect them to go?
- kierenj 8y ago
  I had no idea, and was just sharing what I found
vectorEQ 8y ago
"The fines therefore help to finance the EU and reduce the burden for taxpayers." reduce burden for taxpayers... yeah. how? i don't see my taxes dropping because ppl get fined >.> even if the amount of fines would raise consistently by 1000% still i would pay the same taxes, guarantee you that.
- krageon 8y ago
  If you made the case that everything they said about where the fines go instead of budget is wrong, sure you would be correct. I would expect you to put forward an argument with a bit more substance than "taxes will never go down, I guarantee it" in that case, however.
- Angostura 8y ago
  > i don't see my taxes dropping because ppl get fined What were your tax contributions to the EU last year compared with the year before?

black_puppydog 8y ago

sounds reasonable to me. this way, you get a disincetive to break antitrust rules for google, while not opening up a fight for shares of the money by their competitors afterwards. EUR 1.5b (~$1.7b) is a nice sum to fight over, after all. edit: of course, how big the disincentive is is up for debate. :P

zaarn 8y ago
1.5b€ isn't a lot; Germany + France + UK = 5 Trillion (5,000 billion) as a sibling comment mentioned. They don't care about 1 billion here or there.
- black_puppydog 8y ago
  It would be a lot for any one of Google's competitors to fight over. That is, if the money were e.g. supposed to go directly to the competitors that were harmed here, there would be a huge allocation fight within minutes of this decision...
  - zaarn 8y ago
    But it doesn't, it goes into the EU budget.
    - black_puppydog 8y ago
      exactly. so it sounds reasonable to me. what are debating again? :P

matt4077 8y ago

That happens to most fines, everywhere. In case this is in accusation of corrupt practices aimed to increase the EU budget, note: - Fines account for <5% of the EU's budget - The EU budget is relatively small compared to national governments' budgets. EU: 150 billion, Germany + France + UK = 5 Trillion (5,000 billion). That's leaving out 24 smaller economies. National governments have a lot of input in the decision-making process and couldn't care less about a billion here or there. Especially if it risks impacting perceived rule of law. - In any large bureaucracy, individual decision makers have incentive structure that often diverge fundamentally from those of the organisation as a whole. A prosecutor will have no financial or career advantage tied to the EU's finances. In this specific example, the commissioner responsible (Vestager) is somewhat likely to leave the commission after the May elections anyway, because of another pro-competition decision that was decidedly more important and not appreciated by France and Germany, namely prohibiting the Siemens and Alstom merger. If you sum up all the fines collected by continent, you will see that (a) EU companies pay fines roughly equivalent to their share of economic activity in the EU, (b) Asian companies pay comparatively more, and (c) US companies are actually fined far less than their share of the economy would suggest. The most likely explanation is that rather high standards of enforcement and corporate governance in the US require less EU intervention.

rat9988 8y ago
> The most likely explanation is that rather high standards of enforcement and corporate governance in the US require less EU intervention. Or maybe the american political influence is stronger?
- matt4077 8y ago
  It would need to be stronger than EU member states' influence, which seems unlikely. I also don't remember ever hearing of even attempts to exert influence on these investigations. Note that such agency actions are firewalled from even their EU/US/national political leadership. Even if Trump managed to convince Merkel to intervene, she wouldn't really be able to. To illustrate with a reverse example: Imagine Macron trying to get to get to a judge in a California District Court. There are multiple layers in between where they would tend to consider the call a prank and hang up.

mtgx 8y ago

Where did you expect them to go?

kierenj 8y ago
I had no idea, and was just sharing what I found

vectorEQ 8y ago

"The fines therefore help to finance the EU and reduce the burden for taxpayers." reduce burden for taxpayers... yeah. how? i don't see my taxes dropping because ppl get fined >.> even if the amount of fines would raise consistently by 1000% still i would pay the same taxes, guarantee you that.

krageon 8y ago
If you made the case that everything they said about where the fines go instead of budget is wrong, sure you would be correct. I would expect you to put forward an argument with a bit more substance than "taxes will never go down, I guarantee it" in that case, however.
Angostura 8y ago
> i don't see my taxes dropping because ppl get fined What were your tax contributions to the EU last year compared with the year before?