4 ms·

One thing I'm wondering with these fines is whether they are actually "dissuasive". In particular, the revenue limit seems problematic. For a "normal" company

One thing I'm wondering with these fines is whether they are actually "dissuasive". In particular, the revenue limit seems problematic. For a "normal" company whose profit margin is a relatively small fraction of revenue, 4% of revenue is huge. But for highly profitable large tech companies that make money primarily from ads, it may not be possible to issue a dissuasive fine if it is capped to 4% of revenue. Maybe "4% of revenue, or 200% of profit, whichever is higher" would be a better limit.

jacquesm 5y ago
The first fine, usually not. But that fine indicates that regulators have reached a level of pretty serious frustration at a company not doing enough. Second fines are at the level that you'll be talking about them in the board room on how you managed to mess this up so colossally. I haven't seen any third fines yet, but I'm pretty sure we'll see one in 2022 or 2023. And likely the company that is in luck will go right out of business. And after that I expect compliance will be a much easier subject. So far the whole roll-out has been exactly as I expected it to be.
- tgsovlerkhgsel 5y ago
  My point though is that the maximum fines they can hand out, even for the third offense, are so low that they can't really give effective fines to some companies (unless they apply such a fine e.g. per user whose rights were violated, which doesn't seem to be what they're doing). Grindr made a profit of $31M and a revenue of "well over $100M". The maximum fine is 20M EUR or 4% of revenue (whichever is higher). So assuming under 500M EUR in revenue, the maximum fine is lower than Grindr's 2019 profit. So if Grindr is the lucky one that serves as an example, I don't see how even the absolute worst case fine would put them out of business. Although the max fine is probably higher than the 2019 profit from the EU, I could totally see that changing, and someone deciding that getting slapped with the maximum fine is cheaper than the loss of revenue from complying, especially if it is a business that is entirely in ads.

jacquesm 5y ago

The first fine, usually not. But that fine indicates that regulators have reached a level of pretty serious frustration at a company not doing enough. Second fines are at the level that you'll be talking about them in the board room on how you managed to mess this up so colossally. I haven't seen any third fines yet, but I'm pretty sure we'll see one in 2022 or 2023. And likely the company that is in luck will go right out of business. And after that I expect compliance will be a much easier subject. So far the whole roll-out has been exactly as I expected it to be.

tgsovlerkhgsel 5y ago
My point though is that the maximum fines they can hand out, even for the third offense, are so low that they can't really give effective fines to some companies (unless they apply such a fine e.g. per user whose rights were violated, which doesn't seem to be what they're doing). Grindr made a profit of $31M and a revenue of "well over $100M". The maximum fine is 20M EUR or 4% of revenue (whichever is higher). So assuming under 500M EUR in revenue, the maximum fine is lower than Grindr's 2019 profit. So if Grindr is the lucky one that serves as an example, I don't see how even the absolute worst case fine would put them out of business. Although the max fine is probably higher than the 2019 profit from the EU, I could totally see that changing, and someone deciding that getting slapped with the maximum fine is cheaper than the loss of revenue from complying, especially if it is a business that is entirely in ads.