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A record-breaking 0.3% of their 2019 gross profit.

by nairboon 6y ago

tomalpha 6y ago
I can imagine they have tight margins. This might be more painful than an apparently small percentage might appear.
- black_puppydog 6y ago
  Their profit was $1.5B last year. $41M is less than 3% of that. Not nothing, for sure. But the GDPR allows for up to what, 4% of revenue? Their revenue was $24.3B. That would have been $970M in fines then. H&M got a slap on the wrist. Just like all the other companies before them.
  - humanlion87 6y ago
    To me it seems like a strong warning since it's a "first time offense". Not too high so as to break the company (and say push it to exit the German market). But significant enough to make sure they don't do it again. My guess is repeat offenders will get higher fines.
    - a_imho 6y ago
      Nah, for example Google/Alphabet is a continuous offender ever since GDPR become enforceable and was already fined 3 times according to https://www.enforcementtracker.com/ https://www.enforcementtracker.com/
  - foepys 6y ago
    GDPR is not supposed to kill companies but to make the respect the law and this fine is a warning shot. If H&M ignores GDPR again, the fine will be significantly higher.
    - a_imho 6y ago
      Where is that stated? As a European I would very much expect GDPR to send home the companies who can't play according to the laws.
      - colejohnson66 6y ago
        If they fix themselves after the first fine, killing them would’ve been worse. That’s why it isn’t supposed to do that. For the repeat offenders, they can be fined up to 4% of the profit. If that 4% still doesn’t fix you up, you’ll be fined again and again until you either fix yourself or are killed. So it’s working as intended.
        black_puppydog 6y ago
        Actually it could be 4% of the revenue IIRC. And that can definitely company-ending. Of course that should be an endgame.
        a_imho 6y ago
        Google recently introduced yet another opt-out nagbox. It shows up for example on search and youtube. Non compliant. Repeat offender. What should be the right course of action? As far as I'm aware GDPR was not supposed to be another Cookie Law, it is not working as intended.
    - iso1210 6y ago
      How would fining even _100%_ of their profits for this year kill the company? It'll annoy the shareholders who don't get dividends this year. Maybe they should take more notice in future. Note that this is 2% of profits, not revenue. Compare this to the average German citizen. It would be 2% of the amount they manage to save, not 2% of their income. That would be 2% of about €4500, or €90. [1] That's a parking fine level. [1] https://www.bundesbank.de/resource/blob/617492/cd59713c156ad135e0a84518cd5ed4b6/mL/2016-03-household-data.pdf https://www.bundesbank.de/resource/blob/617492/cd59713c156ad...
Someone 6y ago
I haven’t looked up their gross profit, but https://www.statista.com/statistics/252191/profit-of-the-h-und-m-group-worldwide/ https://www.statista.com/statistics/252191/profit-of-the-h-u...: “In 2019, the global operating profit of the H&M Group was about 1.8 billion U.S. dollars.” ⇒ it’s about 2% of their global profits, for something some they did in Germany. Reading https://www.statista.com/statistics/252187/sales-of-the-hundm-group-by-country/ https://www.statista.com/statistics/252187/sales-of-the-hund..., it seems their German revenues are about 20% of global revenues, so I would guess it’s about 10% of their profits made in Germany.
throw_m239339 6y ago
I don't understand why people keep on implying it's not a big deal. $41M is a lot of money, even for H&M. These corporations didn't become what they are by not being extremely stingy and greedy trying to squeeze up to the last penny that can be squeezed. Here it's certainly not "the cost of doing business".
Grollicus 6y ago
I don't understand why people keep bringing this up. This was misbehavior in one of their stores. (Or whatever is a H&M "Service Center"?) One store will never be in the billions in profits - they will have to work for quite some time at that location to earn that fine back.

A record-breaking 0.3% of their 2019 gross profit.

tomalpha 6y ago

I can imagine they have tight margins. This might be more painful than an apparently small percentage might appear.

black_puppydog 6y ago
Their profit was $1.5B last year. $41M is less than 3% of that. Not nothing, for sure. But the GDPR allows for up to what, 4% of revenue? Their revenue was $24.3B. That would have been $970M in fines then. H&M got a slap on the wrist. Just like all the other companies before them.
- humanlion87 6y ago
  To me it seems like a strong warning since it's a "first time offense". Not too high so as to break the company (and say push it to exit the German market). But significant enough to make sure they don't do it again. My guess is repeat offenders will get higher fines.
  - a_imho 6y ago
    Nah, for example Google/Alphabet is a continuous offender ever since GDPR become enforceable and was already fined 3 times according to https://www.enforcementtracker.com/ https://www.enforcementtracker.com/
- foepys 6y ago
  GDPR is not supposed to kill companies but to make the respect the law and this fine is a warning shot. If H&M ignores GDPR again, the fine will be significantly higher.
  - a_imho 6y ago
    Where is that stated? As a European I would very much expect GDPR to send home the companies who can't play according to the laws.
    - colejohnson66 6y ago
      If they fix themselves after the first fine, killing them would’ve been worse. That’s why it isn’t supposed to do that. For the repeat offenders, they can be fined up to 4% of the profit. If that 4% still doesn’t fix you up, you’ll be fined again and again until you either fix yourself or are killed. So it’s working as intended.
      - black_puppydog 6y ago
        Actually it could be 4% of the revenue IIRC. And that can definitely company-ending. Of course that should be an endgame.
      - a_imho 6y ago
        Google recently introduced yet another opt-out nagbox. It shows up for example on search and youtube. Non compliant. Repeat offender. What should be the right course of action? As far as I'm aware GDPR was not supposed to be another Cookie Law, it is not working as intended.
  - iso1210 6y ago
    How would fining even _100%_ of their profits for this year kill the company? It'll annoy the shareholders who don't get dividends this year. Maybe they should take more notice in future. Note that this is 2% of profits, not revenue. Compare this to the average German citizen. It would be 2% of the amount they manage to save, not 2% of their income. That would be 2% of about €4500, or €90. [1] That's a parking fine level. [1] https://www.bundesbank.de/resource/blob/617492/cd59713c156ad135e0a84518cd5ed4b6/mL/2016-03-household-data.pdf https://www.bundesbank.de/resource/blob/617492/cd59713c156ad...

Someone 6y ago

I haven’t looked up their gross profit, but https://www.statista.com/statistics/252191/profit-of-the-h-und-m-group-worldwide/ https://www.statista.com/statistics/252191/profit-of-the-h-u...: “In 2019, the global operating profit of the H&M Group was about 1.8 billion U.S. dollars.” ⇒ it’s about 2% of their global profits, for something some they did in Germany. Reading https://www.statista.com/statistics/252187/sales-of-the-hundm-group-by-country/ https://www.statista.com/statistics/252187/sales-of-the-hund..., it seems their German revenues are about 20% of global revenues, so I would guess it’s about 10% of their profits made in Germany.

throw_m239339 6y ago

I don't understand why people keep on implying it's not a big deal. $41M is a lot of money, even for H&M. These corporations didn't become what they are by not being extremely stingy and greedy trying to squeeze up to the last penny that can be squeezed. Here it's certainly not "the cost of doing business".

Grollicus 6y ago

I don't understand why people keep bringing this up. This was misbehavior in one of their stores. (Or whatever is a H&M "Service Center"?) One store will never be in the billions in profits - they will have to work for quite some time at that location to earn that fine back.