11 ms·

I wonder at which point the fines will outgrow the "cost of doing business" and really start to hurt? Tech companies are getting fined so often in the EU recen

• moritonal 5y ago
  Fines are designed to disincentivize the cost of doing "illegal" business. It's not an insult, but comes across quite capitalistic to not consider the difference.
  • foepys 5y ago
    Considering those companies are American and the US doesn't really have a concept of nudging a company onto the righteous path via relatively small fines, we might see a lot more fines coming up. The US takes a different approach and imposes heavy fines from right the beginning. Those warning shots from EU counties could very well be interpreted differently than they were meant to be.
• nickpp 5y ago
  This will only stop when USA takes symmetrical measures, fining large European conglomerates in response. It's like tariffs - just another form of protectionism.
  • onion2k 5y ago
    fining large European conglomerates in response Which ones?
    • HPsquared 5y ago
      VW and Airbus are fairly recent examples.
      • float4 5y ago
        VW's diesel scandal and Airbus's bribery fines aren't antitrust cases though. Foreign antitrust cases in particular are often criticised by nationalists.
        • skywal_l 5y ago
          I think that was the parent's point ("which ones?"). There is no EU monopoly in the US. At least, I don't see one.
    • config_yml 5y ago
      This has happened since 2000, cost of doing shady business I guess: - BP: 35.5 - Volkswagen: 25.6 - Deutsche Bank: 18.3 - UBS: 16.8 - BNP: 12.1 - Nat West: 13.4 - Glaxo Smith Kline: 7.8 - Credit Suisse: 10.4 (in billions) edit: formatting
      • VortexDream 5y ago
        Confused. Shouldn't we be fining companies that break the law? We should be expanding it, instead of complaining when another country happens to fine a company that happens to be from the same country as us. As German, fine the fuck out of the corrupt people in Deutsche.
        • deleted 5y ago
          [deleted]
      • onion2k 5y ago
        All of the fines you list there (I think) are for breaking various law like dumping oil in to the sea, cheating emissions tests, and money laundering. It's good and right that they're fined for those things (though the fines could be higher..) None of them are big enough to abuse their respective markets. The fines are not symmetrical to the fine Amazon has been given for abusing the Italian courier market, and there is no equivalent EU company that could be fined for abusing any US market either. EU companies tend not to be dominant in the US.
  • account-5 5y ago
    Is it though? Companies who want to operate in a country have to follow that country's laws and stick by that country's regulations. That's why Apple have to make islands appear bigger than they are for China reasons. US companies can't just operate the same as they do in the US in other countries where people seem to have more protection from malpractice than in the US. Certainly from the outside looking in. The US can only take measures in the US on EU companies that are breaking US law and/or regulations. It's not tit for tat like tariffs which are clearly arbitrary.
    • skywal_l 5y ago
      > The US can only take measures in the US on EU companies that are breaking US law and/or regulations And they do: https://www.bbc.com/news/business-28099694 https://www.bbc.com/news/business-28099694
      • account-5 5y ago
        Exactly, thanks for the counterpoint example. No if we had a decent system for making the likes of Amazon, Facebook, Apple, et al, actually pay taxes in the countries they clearly do business in I think that would be better than one off fines, however big.
        • nickpp 5y ago
          Except EU businesses also pay taxes in the country they are based in, instead of the countries they did business in, like, say, the USA. It was a quid-pro-quo system that started becoming imbalanced when EU failed to create competitive business in tech. But that is not USA's fault.
  • kubb 5y ago
    If the US were to profit from Amazon's extraction of wealth in Italy, I could see where you're coming from. But do they? It's not like Amazon takes the Italian money and builds roads in the US or something.
    • M2Ys4U 5y ago
      Not roads, but there are plenty of bribes^H^H^H^H^H^H^H campaign contributions that come from Amazon.
  • deleted 5y ago
    [deleted]
  • jacquesm 5y ago
    Let's see the names then of those European tech conglomerates that are abusing their market dominance to disadvantage the American public?
    • nickpp 5y ago
      I wish there were some of those "those European tech conglomerates". They'd keep the US giants in check naturally. But the fact that there are pretty much no EU tech giants is not USA's fault...
      • sokoloff 5y ago
        What’s the list of large EU tech successes? Is it just SAP now that Google bought Spotify?
        • nickpp 5y ago
          UiPath is a recent success that comes to mind. Not sure if it's not considered a US business now though.
  • ClumsyPilot 5y ago
    You think US has no protectionism? You cant even deliver cargo between US ports unless you are an American. And don't get me started on Corn. https://en.m.wikipedia.org/wiki/Merchant_Marine_Act_of_1920 https://en.m.wikipedia.org/wiki/Merchant_Marine_Act_of_1920
• kome 5y ago
  It's about following the rules, instead of making the rules. Uber tried to make the rules in Europe: they failed. Europe has a stronger governance then in the US. And yes, it's a pro-market governance.
  • jltsiren 5y ago
    It's more appropriate to say that the EU is pro-competition. They don't care as much about free markets than about competition as means to an end. If there is not enough competition in the market, they often deliberately change the rules to create more.
    • nix23 5y ago
      >It's more appropriate to say that the EU is pro-competition. No, they fear competition that comes from the outside, because Europe has no competing counterpart...in nearly everything.
      • mijamo 5y ago
        The US is much more protectionist than the EU, there are lots of sectors where entering the market is nearly impossible in the US. And saying that Europe has no competing counterpart is ridiculous, just look at Amazon total market share in the different European countries and compare to the US.
        • nix23 5y ago
          >just look at Amazon total market share in the different European countries and compare to the US. Since when is Amazon a European company?
          • cdirkx 5y ago
            The parent probably meant that Amazons market share is much higher in the US than in the EU [1], meaning that in the EU there is thus more competition. [1] https://www.statista.com/statistics/1183515/amazon-market-share-region-worldwide/ https://www.statista.com/statistics/1183515/amazon-market-sh...
• kubb 5y ago
  A billion is nothing for Amazon. They'll barely feel it. It's not even a slap on the wrist - more like waving an index finger snd saying "behave or else".
  • imiric 5y ago
    And yet it's a substantial amount for the Italian government. I'm sure it will be put to good use... In all seriousness, is it documented anywhere where these fines end up and who exactly benefits from them?
    • WastingMyTime89 5y ago
      As a general rule, fines always go back to the general budget in the EU. They are not earmarked and don't directly benefit anyone.
      • gpderetta 5y ago
        AFAICT this fine was levied by the Italian government, not the EU.
        • ClumsyPilot 5y ago
          In the countries that are members of the EU, we don't have US-like 'civil forfeiture' where police just grabs some cash for themselves
        • WastingMyTime89 5y ago
          Italy is an EU member. As a general rule in the EU, fines levied by members governments go back to the general budget of said government.
    • rpadovani 5y ago
      > And yet it's a substantial amount for the Italian government. Wut? Italy tax revenue last year has been 708B euros, this is < 0.2% of just that https://stats.oecd.org/Index.aspx?DataSetCode=REVITA https://stats.oecd.org/Index.aspx?DataSetCode=REVITA
• nathias 5y ago
  when we start charging %
• lb0 5y ago
  Fines are there for good valid reason? Rarely they change behavior of companies, because fines are still peanuts compared to profit they gain by this.. so not really getting your comment.. they are relatively so small we cannot even call them fines.
  • roenxi 5y ago
    > Fines are there for good valid reason? Empirically, we know that is not true. Some legislation embodies bad ideas. China - alleged communists - have outperformed the EU at creating a viable software industry. Regardless of the arguments about what approaches are good and bad, there is pretty evidence that whatever "good" means, Europe is struggling to achieve it.
    • forgotmyoldname 5y ago
      >China - alleged communists - have outperformed the EU at creating a viable software industry. If anything, this could be because of the communist aspect. Companies of a certain size become entwined with the government in China. Funding isn't really a concern when the state backs you up. Similarly, but without state support, the US has Silicon Valley investors who'll always throw cash at companies with the right connections and sometimes random people with decent business ideas. Does the EU have anything similar to grow companies?
      • deleted 5y ago
        [deleted]
      • panick21_ 5y ago
        Yeah large companies in the EU never get entwined with the government. In fact, I would argue because of the many small countries, many companies are incredibly entwined with the government. Because many of these countries only have few large companies. I think the West loves saying 'all China suggests is because the government just finances every single company'. In reality this just doesn't seem to practically hold up. If all the companies are always losing money and have infinite money. Why are many they so good as scraping, forward looking, innovative and so on. Its not government money that makes some of the China car makers better at software, or faster at adopting new innovations. A contractor of Arianespace for Ariane 6 had an issue, RUAG had an issue with fairing. And the Swiss government jumped in. And this happen very often in many industries. I am not confident that all of the recent space companies in China would get the same treatment.
• john37386 5y ago
  Which one of the 2 had a bigger revenue impact on Amazon? 1. That fine mention in this article 2. The outage that happened in AWS US-East-1 region earlier this week
  • aigo 5y ago
    Revenue? The fine. Reputation? The outage. Companies who host on AWS don't care that the retail arm abuses its market position, they care about reliability.
  • orf 5y ago
    The fine, certainly
  • Hamuko 5y ago
    If us-east-1 going down for about 24 hours costs Amazon $1.3+ billion, wouldn't that make the yearly revenue of that region something like $475 billion? I think that's like AWS and Amazon yearly revenues put together.
    • andruby 5y ago
      the cost of downtime can be a lot higher than the revenue for the same time in "uptime". some SLA's include extra compensation. there is reputation damage, ie lost future sales. perhaps also extra costs were made to resolve things.
      • Hamuko 5y ago
        I still have my doubts about 24 hours of reduced performance on us-east-1 being so costly that it's equivalent to 1% of yearly Amazon revenue. I know that we run some services on us-east-1 and they never completely stopped working during the downtime, so it wasn't a complete region failure.
      • bryanrasmussen 5y ago
        >there is reputation damage, ie lost future sales. hard to estimate those though.
• emn13 5y ago
  So far, the fines have been solidly in the "acceptable cost of doing business" category. If anything, the fines are at least an order of magnitude too small. For a sense of scale, VW North-America (~38B) is of a comparable revenue to Amazon EU (~44B). But the VW emissions scandal cost them almost a full years of that revenue, ... and they're not leaving the market. (In general, US fines are much higher than EU fines, BTW). Don't forget that such fines are generally unlikely to be levied very frequently because court battles are drawn out and law enforcement has limited resources too. Additionally, specifically in the EU (but also partially in the US) there's the issue that enforcement is fractured across states, so it's easier for a corp like this to absorb the occasional loss - had this fine been scaled for the entire EU, not just Italy, the cost might have been significant, but alas. Additionally, while punitive damages in civil litigation are obviously problematic, they do address real issues that (AFAIK, IANAL) the EU (an it's member states) doesn't have a real answer for - which makes rules-breaking less disincentivized. Finally, fines that are related to past revenue and disregard stock price and current revenue and growth are likely in any case to have less impact in shaping behavior in rapidly growing sectors (as in sectors with huge profit margins) - and amazon's EU business is rapidly growing. If the aim of enforcement is to at the very least ensure a change in behavior, and, failing that, to actually fine a company out of business, then EU fines need to be much, much higher. Given how rarely they're levied, the extreme delay in collection, and how small they are, I kind of doubt they're enough to really trigger the kind of behavior you'd want - namely that large corps actually follow the rules right off the bat, and not just after years of being able to essentially manipulate the market into whatever shape they like.
• zitterbewegung 5y ago
  If you really want to make a company comply you just have to do this : add a fine for each transaction Amazon Europe does such as 10%. See https://www.bloomberg.com/news/articles/2020-08-24/wells-fargo-asset-cap-is-now-one-of-the-costliest-bank-penalties https://www.bloomberg.com/news/articles/2020-08-24/wells-far...
• mercy_dude 5y ago
  I am as much with you as anyone to fine the tech companies but knowing Italy and how corrupt the bureaucrats are there including from their highest level of government to lowest petty officers, I find it a bit hypocritical. OK so Amazon has dominance but over who? Italy has become such a pariah country after last financial crisis I would be surprised if no one even wants to do business there. Italian government of course will oblige, they will happily see their people rot and suffer as they have done over last 20yrs. Ask any of the Italian diaspora, there is not a single thing positive that has happened there in last 10-15yrs. Aside from the Pope.
  • flexie 5y ago
    Pariah country? Ask any large diaspora, and they will readily tell you bad things about their country of origin. That's often why they migrated. I agree that when it comes to IT, Italy doesn't perform like California, New York state, the UK, the Netherlands, the Scandinavian countries and a few other US or European states or countries. Notice how all those states and countries have English as the official language or a very strong second language. But Italy has lots of other great achievements in industries areas like culture, food, tourism, and in more traditional heavy industries like car manufacturing, trains, etc.
    • thow-58d4e8b 5y ago
      And it's not like they're just coasting on their past glory. As an exaple: the country is now criss-crossed by high-speed rail (Frecciarossa), 300km/h, so good that it is out-competing local flights. Most of it built within the last decade
    • mmarq 5y ago
      Italy is at best stuck in the 70s, and it's becoming more irrelevant each day. It's a place where starting a company takes 3 months and costs 5000 euros just for the paperwork, where only 20% of the population completes tertiary education and that can't attract foreign (or expatriated) workers even if they are offered massive tax discounts (see "rientro dei cervelli"). Salaries are so low that an Italian engineer close to retirement earns less than a German engineer at their first job after graduation (which should say something about value added produced and the tax system). English has nothing to do with it, and there are enough Italians who can speak English to handle all transactions with foreigners. And the more people talk about "culture, food, tourism", as if Italy were some third world tropical island, the more you know it's getting bad.
• peoplefromibiza 5y ago
  In Italy specifically it's not about the fine, but the rules Amazon will have to abide in the future. One of the main points is that Amazon cannot have private deals, de facto monopolizing the business of logistic.
• bwb 5y ago
  Also keep in mind it takes year, but often the EU courts don't allow these nonsensical fines. The media doesn't usually post the appeals year later where this is lowered to 1/10th the size or thrown out. Italian and most politicians love this to show they are doing something, instead of the hard work to define out working standards that actually help online e-commerce for small to medium sized business.