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$1.2B appropriate? It’s hard for me to tell in this case because I don’t know the size of the market they colluded to capture. Did Apple gain more than $1.2B i

$1.2B appropriate? It’s hard for me to tell in this case because I don’t know the size of the market they colluded to capture. Did Apple gain more than $1.2B in profits? Is this just a cost of doing business? There are so many cases when the fine is worth the expense, like advertising. I would much rather see a corporation be banned from a sector for a period of time when they get caught, in addition to a fine. Wells Fargo gets caught creating fake credit card accounts for customers? Wells Fargo can no longer sign up new credit card customers for 2 years. Equafax leaked everyone’s social security numbers? You are banned from accepting new customers for 3 years. The punishments I'm suggesting are off-the-cuff but some sort of corporate business practice penalty is more fitting than just a fine. It also gives the company time to correct the problem before they continue to do business in that sector.

dmos62 7y ago
Reminds me of when HSBC knowingly laundered money for drug dealers and terror organizations for years and was fined < 5% of its profits that year.
- missedthecue 7y ago
  HSBC allegedly laundered 800 million (not revenue, not profit, but total amount allegedly laundered). They were fined 1.9 billion. People really need to stop with the 'cost of doing business' BS
  - TheOtherHobbes 7y ago
    'Ultimately, the prosecutor’s office came to believe the case was “the tip of the iceberg” in terms of suspicious transactions conducted through HSBC, according to documents reviewed by Reuters and reported earlier this year.' https://www.reuters.com/article/us-hsbc-probe/hsbc-to-pay-1-9-billion-u-s-fine-in-money-laundering-case-idUSBRE8BA05M20121211 https://www.reuters.com/article/us-hsbc-probe/hsbc-to-pay-1-...
    - nradov 7y ago
      Punishments are based on what can be proved in court, not what prosecutors believe.
      - emiliobumachar 7y ago
        As it should be. But the "cost of doing business" theory can survive the fine being much bigger than the provable ill-gotten profits. It's just smaller then the overall ill-gotten profits.
      - thu2111 7y ago
        In this case it actually wasn't though. The case was never tried. In the US the government can impose huge fines for AML violations directly, without ever having to prove their case. Combined with a culture of hyper-aggressive prosecutors and you don't really get justice in the traditional sense. Dig into the details and you'll see that HSBC's "crime" looks very different to how it's been publicly portrayed.
        dmos62 7y ago
        They sabotaged their own money laundering filters: they edited e.g. "Pablo Escobar" to "Pablo Escobar-", so that that activity wouldn't get flagged. What are your optics of that?
        thu2111 7y ago
        So the USG claims. But they claim many things; without a trial and a proper defence who knows the truth? A lot of the claims in that case were dubious, like the idea that every transaction connected to Mexico should have been treated as inherently suspicious. Why? Well, because the Treasury decided that would have been convenient for their case. What about the huge numbers of non-suspicious Mexican transactions? Irrelevant - HSBC should have institutionally "just known".
skrowl 7y ago
$1.2B is probably MUCH less than the amount of money Apple made in this price fixing scheme, but it's hard to say without the exact numbers.
- Razengan 7y ago
  How can you be sure that it’s much less?
  - skrowl 7y ago
    Price fixing at the scale Apple operates. Apple made $267B in revenue (not profit) last year. This fine is 0.44% of that amount. Assuming this price fixing had gone on for multiple years, it would be shocking if they didn't make much more than 1.2T on it.
    - pwinnski 7y ago
      What percentage of Apple's revenue comes from France? French courts are concerned with price fixing in France, and I'm not sure that price fixing in France amounted to $1.2B additional profit. It's not that large of a market.
- colejohnson66 7y ago
  > but it's hard to say without the exact numbers. So you’re speculating with no evidence? Let’s avoid the pitchforks until we actually have the data.
- microtherion 7y ago
  It's not clear to me that Apple made any money directly in the (alleged) price fixing scheme. All the items sold to consumers were ultimately manufactured by Apple, and I don't think it's disputed that Apple can set the prices it charges distributors (or the prices it charges consumers for items sold through the Apple Store itself). What Apple is NOT allowed to do is tell distributors how much to charge THEIR customers. But that does not directly affect their bottom line; if anything, it's more of a long term effect of price stability or a certain structure of distributor networks.
nuclearnice1 7y ago
The corporation has owners and operators. These fines rightfully hit the owners. I would suggest that fines also hit the operators. If Tim Cook paid $200 million dollar fine or went to jail for 15 days for this, internal controls and compliance would be rock solid. I think of the Madoff scandal. If Greg Katz[1], Saul Katz[2] and Fred Wilpon[3] had been jailed, we might avoid the next company that followed Sterling Equities lead in enable a huge fraud. These guys were next to the fraud for 20 years and skated with a fine. Just an example. Punish individuals not just companies. James Surowiecki wrote about it in the New Yorkerin 2014, SEC chair Chair Jay Clayton has mentioned it in 2017, and Biden mentioned it last night in the debate. [1] https://en.m.wikipedia.org/wiki/Participants_in_the_Madoff_investment_scandal#Greg_Katz https://en.m.wikipedia.org/wiki/Participants_in_the_Madoff_i... [2] https://en.m.wikipedia.org/wiki/Saul_Katz#Madoff_Ponzi_Scheme https://en.m.wikipedia.org/wiki/Saul_Katz#Madoff_Ponzi_Schem... [3] https://en.m.wikipedia.org/wiki/Fred_Wilpon#Madoff_investment_scandal https://en.m.wikipedia.org/wiki/Fred_Wilpon#Madoff_investmen...
- IMTDb 7y ago
  I, for one, would be immediately leaving my C-level position in a startup out of the fear that one of my colleagues is doing something terribly wrong behind my back. I - really - dont think that's the cas. But if there is the slightest chance that I might end up behind bars and get my life upside down because a judge thinks I am responsible as well, I will close the company and fire all employees - it's just not worth it.
  - Ididntdothis 7y ago
    At a minimum the executives should lose their net worth. We are always told that they do the risky work which means that they should also have downside risk. When you look at executives at Wells Fargo, Equifax and other companies it seems they have huge upside when nothing goes wrong, or smaller but still very big side upside when things go wrong under their watch.
    - smabie 7y ago
      That’s not how it works. Limited liability is the foundation of modern capitalism. Without that, the world would be very different and a lot worse.
jariel 7y ago
"$1.2B appropriate? It’s hard for me to tell in this case because " It's 'hard to tell' because we don't know what kind of evidence there is, and how assertive supposed behavior was, let alone if they broke the law. There is more information on Tech Crunch and it really does not look damming.
rixed 7y ago
It sounds like in essence, what you are asking for is we rollback the invention of the juridical person. I've read about this view a few times but cannot find any relevant reference at the moment.

dmos62 7y ago

Reminds me of when HSBC knowingly laundered money for drug dealers and terror organizations for years and was fined < 5% of its profits that year.

missedthecue 7y ago
HSBC allegedly laundered 800 million (not revenue, not profit, but total amount allegedly laundered). They were fined 1.9 billion. People really need to stop with the 'cost of doing business' BS
- TheOtherHobbes 7y ago
  'Ultimately, the prosecutor’s office came to believe the case was “the tip of the iceberg” in terms of suspicious transactions conducted through HSBC, according to documents reviewed by Reuters and reported earlier this year.' https://www.reuters.com/article/us-hsbc-probe/hsbc-to-pay-1-9-billion-u-s-fine-in-money-laundering-case-idUSBRE8BA05M20121211 https://www.reuters.com/article/us-hsbc-probe/hsbc-to-pay-1-...
  - nradov 7y ago
    Punishments are based on what can be proved in court, not what prosecutors believe.
    - emiliobumachar 7y ago
      As it should be. But the "cost of doing business" theory can survive the fine being much bigger than the provable ill-gotten profits. It's just smaller then the overall ill-gotten profits.
    - thu2111 7y ago
      In this case it actually wasn't though. The case was never tried. In the US the government can impose huge fines for AML violations directly, without ever having to prove their case. Combined with a culture of hyper-aggressive prosecutors and you don't really get justice in the traditional sense. Dig into the details and you'll see that HSBC's "crime" looks very different to how it's been publicly portrayed.
      - dmos62 7y ago
        They sabotaged their own money laundering filters: they edited e.g. "Pablo Escobar" to "Pablo Escobar-", so that that activity wouldn't get flagged. What are your optics of that?
        thu2111 7y ago
        So the USG claims. But they claim many things; without a trial and a proper defence who knows the truth? A lot of the claims in that case were dubious, like the idea that every transaction connected to Mexico should have been treated as inherently suspicious. Why? Well, because the Treasury decided that would have been convenient for their case. What about the huge numbers of non-suspicious Mexican transactions? Irrelevant - HSBC should have institutionally "just known".

skrowl 7y ago

$1.2B is probably MUCH less than the amount of money Apple made in this price fixing scheme, but it's hard to say without the exact numbers.

Razengan 7y ago
How can you be sure that it’s much less?
- skrowl 7y ago
  Price fixing at the scale Apple operates. Apple made $267B in revenue (not profit) last year. This fine is 0.44% of that amount. Assuming this price fixing had gone on for multiple years, it would be shocking if they didn't make much more than 1.2T on it.
  - pwinnski 7y ago
    What percentage of Apple's revenue comes from France? French courts are concerned with price fixing in France, and I'm not sure that price fixing in France amounted to $1.2B additional profit. It's not that large of a market.
colejohnson66 7y ago
> but it's hard to say without the exact numbers. So you’re speculating with no evidence? Let’s avoid the pitchforks until we actually have the data.
microtherion 7y ago
It's not clear to me that Apple made any money directly in the (alleged) price fixing scheme. All the items sold to consumers were ultimately manufactured by Apple, and I don't think it's disputed that Apple can set the prices it charges distributors (or the prices it charges consumers for items sold through the Apple Store itself). What Apple is NOT allowed to do is tell distributors how much to charge THEIR customers. But that does not directly affect their bottom line; if anything, it's more of a long term effect of price stability or a certain structure of distributor networks.

nuclearnice1 7y ago

The corporation has owners and operators. These fines rightfully hit the owners. I would suggest that fines also hit the operators. If Tim Cook paid $200 million dollar fine or went to jail for 15 days for this, internal controls and compliance would be rock solid. I think of the Madoff scandal. If Greg Katz[1], Saul Katz[2] and Fred Wilpon[3] had been jailed, we might avoid the next company that followed Sterling Equities lead in enable a huge fraud. These guys were next to the fraud for 20 years and skated with a fine. Just an example. Punish individuals not just companies. James Surowiecki wrote about it in the New Yorkerin 2014, SEC chair Chair Jay Clayton has mentioned it in 2017, and Biden mentioned it last night in the debate. [1] https://en.m.wikipedia.org/wiki/Participants_in_the_Madoff_investment_scandal#Greg_Katz https://en.m.wikipedia.org/wiki/Participants_in_the_Madoff_i... [2] https://en.m.wikipedia.org/wiki/Saul_Katz#Madoff_Ponzi_Scheme https://en.m.wikipedia.org/wiki/Saul_Katz#Madoff_Ponzi_Schem... [3] https://en.m.wikipedia.org/wiki/Fred_Wilpon#Madoff_investment_scandal https://en.m.wikipedia.org/wiki/Fred_Wilpon#Madoff_investmen...

IMTDb 7y ago
I, for one, would be immediately leaving my C-level position in a startup out of the fear that one of my colleagues is doing something terribly wrong behind my back. I - really - dont think that's the cas. But if there is the slightest chance that I might end up behind bars and get my life upside down because a judge thinks I am responsible as well, I will close the company and fire all employees - it's just not worth it.
- Ididntdothis 7y ago
  At a minimum the executives should lose their net worth. We are always told that they do the risky work which means that they should also have downside risk. When you look at executives at Wells Fargo, Equifax and other companies it seems they have huge upside when nothing goes wrong, or smaller but still very big side upside when things go wrong under their watch.
  - smabie 7y ago
    That’s not how it works. Limited liability is the foundation of modern capitalism. Without that, the world would be very different and a lot worse.

jariel 7y ago

"$1.2B appropriate? It’s hard for me to tell in this case because " It's 'hard to tell' because we don't know what kind of evidence there is, and how assertive supposed behavior was, let alone if they broke the law. There is more information on Tech Crunch and it really does not look damming.

rixed 7y ago

It sounds like in essence, what you are asking for is we rollback the invention of the juridical person. I've read about this view a few times but cannot find any relevant reference at the moment.