9 ms·

Big Tech has already made enough money in 2024 to pay all its 2023 fines

207 points by spiros 3y ago

hliyan 3y ago
Either the fines need to be high enough until there is a material impact to shareholders, or natural persons who make decisions within the corporation needs to be held accountable (not just the legal person), OR, we need to fundamentally rethink what a corporation's charter must necessarily include (in addition to shareholder returns).
- bilekas 3y ago
  What is the pushback exactly against fining based on average yearly revenues ? The EU has been issuing fines to google as mentioned ($8 billion still owed) but I never understood why they can't simply charge a 20% of revenue within the EU. The fines are not to redeem some income for the EU, they're to deter bad actors. This is just not happening.
  - orwin 3y ago
    Because they do montages to make their local revenue unknowable. Through clever use of debt and licensing.
    - disgruntledphd2 3y ago
      Not across the EU. They have to book EU revenue somewhere in the EU, so it's entirely knowable how much they make. This is also why the fines are based on revenue, to avoid transfer pricing shenanigans.
- vnjxk 3y ago
  Could you imagine adding additional fine to shareholders? Like a reverse dividend? I wonder what disasters or blesses this will cause
  - bilekas 3y ago
    This SHOULD be the way as they are the ones who stand to gain the most. They should be the ones who lose the most if the actions of their responsibilities are nefarious.
    - Sai_ 3y ago
      Isn’t the share price getting decimated the punishment for shareholders?
      - bilekas 3y ago
        That would be but the miniscule fines don't have any effect on the share price ?
    - postingawayonhn 3y ago
      It would make it incredibly risky to be a non-management shareholder.
      - bilekas 3y ago
        But in turn it would incentivize some better practices to avoid risks of fines.. It wouldn't be risky if companies didn't act maliciously and ignore regulations etc.
  - hliyan 3y ago
    That actually sounds like a remarkably elegant way to do it. We'll never know what the second order consequences could be until we try it. But I doubt they'll be as bad as what we're experiencing now.
  - mschuster91 3y ago
    No. That would destroy the stock markets in an instant. The way it has always been is that with a classic stock, the only risk an investor has is the money they paid someone to acquire the stock. There exist other classes with actual post-buy liabilities, e.g. stock options, as one particularly unlucky poor sod discovered at the start of the 2020 plaguefest [1], but normally these are (supposed to be) heavily gated for actually qualified investors for precisely that reason. Personally, I'd keep it that way... and nationalize companies that can't pay their fees, without paying out the shareholders. That way, the shareholders get punished, the jobs created by the company aren't lost, and the government gains something of value. [1] https://www.forbes.com/sites/sergeiklebnikov/2020/06/17/20-year-old-robinhood-customer-dies-by-suicide-after-seeing-a-730000-negative-balance/ https://www.forbes.com/sites/sergeiklebnikov/2020/06/17/20-y...
- bko 3y ago
  Or, alternative explanation, the fines aren't meant to deter behavior but serve as a way of rent seeking, signaling by politicians and bureaucrats and capturing ever more regulatory authority by various groups
  - BirAdam 3y ago
    It also serves as deterrent for smaller companies, and as regulatory capture occurs pulls the ladder up behind the big tech companies.
    - ethbr1 3y ago
      The fines aren't large enough to be materially impactful to governments. So if it's rent seeking, it's a poor job of it. I'd expect they're at the levels they are because laws atrophied during the 80s - 00s, and this is indeed the maximum remedy that can currently be sought. Providing for tighter penalty scaling with relation to company size would go a long way to fixing this, including for small firms.
    - janice1999 3y ago
      It's really the opposite. The EU in particular is seeking to curb the power of monopolistic big tech. The fines are in responsive to anti-competitive behaviour. Smaller companies should be happy.
rpmisms 3y ago
Instead of fines, it should be forced price reductions.
- stetrain 3y ago
  Wouldn't that hurt margins but also increase market power for these companies? Also how would it work if the product is already "free" to the consumer, ie Facebook or Google?
- PinguTS 3y ago
  Define price reduction for Meta, Alphabet.
djoldman 3y ago
This article makes a good point comparing the relatively small magnitude of fines paid to revenue earned. It follows that perhaps fines are not deterring. Perhaps a stronger deterrent would be injunction-based: companies found to be in violation of regulations and laws might be enjoined completely from operating in a commercial space. "One strike and you're out."
- bilekas 3y ago
  Isn't this one reason they use umbrella companies anyway ? IE: Meta Alphabet etc > and laws might be enjoined completely from operating in a commercial space. "One strike and you're out." They can just move the 'assets' of that bad actor to another one and continue as normal ?
- vmfunction 3y ago
  Fine for big corp are just cost of doing business. All the big corp have some money stashed away for that purpose. It is all about working out with the AG on what the fine will be.
- SamuelAdams 3y ago
  Revenue and profit are not the same though.
  - piva00 3y ago
    Profit margin for Big Tech is absurdly big compared to most other industries though, it makes much less of a difference than for grocers or other industries with razor-thin margins.
charlieyu1 3y ago
Day 7 is 2% of the year. Is it not enough deterrent? If my portfolio is missing 2% growth per year I’d be pretty worrying
- atorodius 3y ago
  Thet is not the same. it would be eg if you target 10% growth, the fines would be 2% of that so 0.2%
  - charlieyu1 3y ago
    It is though, instead of getting $100 they are now only getting 98% because they miss 7 days of revenue. And actually it is going to be much worse because we haven’t deducted operating costs to find profit
- zanellato19 3y ago
  Only if this growth hadn't accelerated because of the actions that caused the fine. If those actions caused you a 10% increase, then 2% is nothing.
- globular-toast 3y ago
  Evidently not. But I'm not sure if such fines are supposed to be a deterrent or supposed to be to pay to fix the damage done. Somehow I think they are even further from covering the latter.
freitzkriesler2 3y ago
This literally doesn't matter. these fines are literally "fun taxes" to deep pockets. Make them hurt otherwise it won't stop.
spiffytech 3y ago
Should this be measuring against profit, not revenue? Edit: "This" meaning the claim that they've made enough to pay back fines, not how those fines are decided.
- shanehoban 3y ago
  If the fines would impact profits in a significant way, the companies would just ensure they have no profit on paper going forward.
  - bko 3y ago
    I didn't know companies can just ensure they have no profit on paper. Why don't they do that now and not pay corporate taxes? Why is it dependent on fines?
    - fifteen1506 3y ago
      No clue on your specific question. However it is a known practice. Most Hollywood studios do it. That's why actors which claimed a percentage of profits of the movie would get $0.
      - waffleiron 3y ago
        https://en.wikipedia.org/wiki/Hollywood_accounting https://en.wikipedia.org/wiki/Hollywood_accounting Handy wikipedia link
      - deleted 3y ago
        [deleted]
bitshiftfaced 3y ago
Shareholders care more about net profit than revenue. Using revenue makes the number more clickbaity. Also, you claim this isn't a deterrent, but you don't explain why. How do we know that tech companies weren't just well-behaved last year? Or, should one week's revenue never ever be able to pay off a company's past year's fines, and we should always assume tech companies are more evil than that?
- devsda 3y ago
  They were fined for breaking laws and them making a profit out of the act is irrelevant and secondary(though its the main driver). If profit is the only benchmark then companies can use some creative accounting practices to reduce their exposure.
- deleted 3y ago
  [deleted]
- rollcat 3y ago
  I have a simple and very fair solution to that problem: make each consecutive fine for a repeated offense grow exponentially. If you make an honest mistake (or even are just testing the waters to see what you can get away with), the fine should be bearable. But being able to treat fines as just cost of doing business will indeed lead to a world where nothing is ever wrong or immoral, as long as you keep making money.
- arghwhat 3y ago
  Profit is an easier number to manipulate than revenue through expenses and liability. E.g., by increasing expenses to executive salaries and by investing huge sums in growth projects or new strategies. For large companies, particularly those where investors prioritize growth, cash flow is often more interesting than profit.
  - bitshiftfaced 3y ago
    Oh I agree that if you're going to fee based on something, revenue is better than profit. My post wasn't trying to say otherwise. It's just that I don't believe it makes sense to gauge how fast companies pay off the fee in terms of revenue, such as was done in the article.
jongjong 3y ago
The concept of a corporation is fundamentally unjust. It doesn't make sense that there are entities which have more rights than people. If I do a crime, I go to jail. If a corporation does a crime, they only need to pay a small fine. Not to mention that they have many thousands of people working for them doing crimes on their behalf for which are never caught and never punished. Just the scale of a corporation, makes it impossible to prevent crime. They are crime factories by design. If a nation state kills someone, it's not called murder. If a corporation commits fraud, it's not called fraud... So long as they don't run out of money. Corporations can influence laws in ways that I can't. I can't even talk to a politician. Corporations have far better access to government contracts and the tender process than regular citizens. There is subtle, but harmful corruption constantly taking place behind the scenes. Not only that, but the people who work for corporations are, to some extent, shielded from the crimes that they commit on behalf of corporations as it limits their liability by design, not to mention all the opportunities for cover ups and deflection of liability that they provide. It absorbs and neutralizes liability. Nobody ends up taking responsibility. The crimes keep getting more frequent; corporations keep finding people who are more and more desperate and willing to commit crimes on their behalf. People create shell companies just to launder borrowed money to corporations, in the hope that they will get a well paid corporate job from them after their shell company runs out of money... The list of schemes/crimes is endless and beyond my imagination. The first corporations ended up bankrupt. E.g. Both Dutch and British East India Company, South Sea Company, Mississippi Company... They ALL turned into bubbles and collapsed spectacularly, every single time. That was before the fiat monetary system came along and started propping them all up... Now the scam never ends. The entire economy is fully monopolized by these proven scam constructs. They suck up all opportunities and produce cheap, low quality products... but because they take away opportunities from everyone, nobody who isn't a corporate shareholder has surplus income and are therefore forced to buy cheap, low quality corporate products.
- boeingUH60 3y ago
  > If I do a crime, I go to jail. If a corporation does a crime, they only need to pay a small fine. Many corporate executives have gone to prison for crimes they committed while working. > Corporations can influence laws in ways that I can't. I can't even talk to a politician. You can talk to a politician if you bother to call or email their office. Stop being obtuse. > Corporations have far better access to government contracts and the tender process than regular citizens. There is subtle, but harmful corruption constantly taking place behind the scenes. You want individuals to bid directly for government contracts? > Not only that, but the people who work for corporations are, to some extent, shielded from the crimes that they commit on behalf of corporations as it limits their liability by design. It absorbs and neutralizes liability. Nobody ends up taking responsibility. The crimes keep getting more frequent; corporations keep finding people who are more and more desperate and willing to commit crimes on their behalf. Opinion, not fact. Maybe you're complaining they should be held more accountable, which is valid. But working under a corporation can't prevent anything if the DOJ decides to go after the individual perpetrator. Thanks for falling for the author's clickbait though..
iamleppert 3y ago
The fines should be measured in units of time, not % of revenue, or some fixed dollar number. All other measures can be gamed, except time. For example, Meta would think twice about violating privacy if they were suspended from doing business for a month, or their fine amounted to a month of revenue with definite start and end dates. We already do the same thing with people (taking away their freedom for lengths of time), it’s time to have the same punishments for corrupt corporations. Shutting down their operations completely for lengths of time would also have other consequences besides financial.
- LeafItAlone 3y ago
  Is that not just also harming (again) their customers?
- dusted 3y ago
  Indeed, money is a condensate of time.
- lettergram 3y ago
  As a citizen I don’t want government taking away my ability to communicate with family because my government wants some access controls. I’m all for punishing companies. An easier solution is to combine fines with criminal penalties on citizens who break the laws. Ie if you work for a company and spy on someone, you go to jail as if you didn’t work for the company.
- diggan 3y ago
  > The fines should be measured in units of time, not % of revenue Why not just increase the percentage so it's no longer profitable to break laws? If say Meta was found to violate users privacy and illegally gained a 5% extra net revenue because of it, fine them 10x of what they gained, so 50% of the revenue. I'm fairly sure they'd start moving fast without breaking things if that was the case.
kmlx 3y ago
from the article: > As of seven days and three hours into 2024, they had already earned enough revenue to pay it all off. revenue is not the same as profit. this is basic stuff. from the same article: > Still, revenue is a more accurate depiction of a company’s size and profitability. it seems like this is rookie hour. then we look at the author's previous posts: https://proton.me/blog/big-tech-ipef https://proton.me/blog/big-tech-ipef With new trade deal, Big Tech wants to be above the law https://proton.me/blog/big-tech-bigger-fines https://proton.me/blog/big-tech-bigger-fines Why we need bigger fines for Big Tech got it. there is an axe to grind.
- hef19898 3y ago
  The moment people fail to differentiate between revenue and profit, one can safely ignore the rest of the article.
  - anticorporate 3y ago
    I don't think TFA failed to differentiate revenue and profit, though. I think the point is these companies have enough revenue to pay off the fines, and 358 days to return to profitability for the year, even starting out with an operating loss.
    - hef19898 3y ago
      And now you are mixing free cash flow, with revenue, with profits...
      - ethbr1 3y ago
        Instead of bikeshedding, you might suggest an alternative time-vs-income-based measurement that you think is better? It's obviously not profit, which it would be crazy to "require" to pay fines when looking at companies. So what would you suggest using as a meter stick?
        3y ago
tokai 3y ago
The only way to tackle this is to put leadership in prison. If that is not possible give them the oligarch experience; frozen assets, interpol warrant, etc. It makes no sense that breaking the law gives milder consequences just as long as your crime is transnational and very extensive in scope.
- Chris2048 3y ago
  Why not higher fines? % of profit that increases each time?
  - anticorporate 3y ago
    Once you reach a certain level of wealth, fines are no longer consequential. When you can restructure both your corporate and personal assets to span multiple countries with different regulations and poor cooperation, you've effective avoided them.
    - hiq 3y ago
      What about the 4% of the global turnover of a company as mentioned in https://gdpr-info.eu/issues/fines-penalties/ https://gdpr-info.eu/issues/fines-penalties/?
      - anticorporate 3y ago
        If it were effective, we wouldn't all endure daily GDPR violations. But we do.
        Chris2048 3y ago
        Non-enforcement is a different issue to fines being too low.
        anticorporate 3y ago
        They're related, though. A portion of fines fund enforcement activity. (IMHO, a higher portion should go to enforcement. Right now way too much goes into general funds.)
postingawayonhn 3y ago
Isn't this to be expected? I probably made enough money to pay all my 2023 fines by midday on January 1st.
lakomen 3y ago
Revenue isn't profits
nickysielicki 3y ago
It's so easy to tell when Europe is voting on a post versus the US. Fines against these companies are predominantly rent seeking. You should be extra suspicious when the fines are coming from countries where they don't have offices. FTA: > Big Tech companies can further water down the potential sting of these fines by delaying payment for years(new window). They’ve done this by filing appeals, counter-suing, or simply refusing to pay. Some notable examples include: Sorry, but I give the companies the benefit of the doubt here: they have good legal teams and don't generally fight things when they can't win. Fighting these fines isn't evidence that big tech is evil and refuses to follow the low, it's evidence that these countries are rent seeking by charging them bogus fines, which their world-class legal teams (rightly) contest.
- hef19898 3y ago
  Thr EU is fining EU based companies as well. And all Big Tech companies have offices in the EU. The way proper legal systems work, is both sides litigate a case if they see a chance of winning it, goes for both involved parties. As much as big tech isn't per-se evil for having to pay fines, the governments involved aren't rent seeking...
- arp242 3y ago
  > You should be extra suspicious when the fines are coming from countries where they don't have offices. They're doing business in these countries, and making a profit from that. Where they do or don't have an office isn't that important: it's about who they're doing business with. And it's really very simple: "obey the law or sod off". If you think that's too much bother then that's completely fair – no hard feelings. Just don't do business then.
  - nickysielicki 3y ago
    > Where they do or don't have an office isn't that important: it's about who they're doing business with. It's important because it frames the lawsuit. If the company has a large presence in the country and is employing thousands of high-earning tax payers and leasing expensive offices, then the governments are not likely to bring frivolous fines against the company for no reason. On the other hand, if the company is making money and not paying anything back into their economy, the government has nothing to lose by attempting to extort them. > And it's really very simple: "obey the law or sod off". If you think that's too much bother then that's completely fair – no hard feelings. Just don't do business then. It's completely arbitrary in a lot of these cases. India fining Google $161m for smartphone market dominance and demanding specific remedies like not installing Google Chrome, YouTube, and Google Maps? How the hell was Google supposed to anticipate that? Almost all of these in the table are like this. France fining Microsoft $64m (!) because their advertising cookie opt-out flow was not deemed clear enough? It's not that the flow didn't exist, mind you, it's that the button wasn't on the same page as the "accept cookies" button. Where in French or EU law does that exact requirement exist?
bmulyadi 3y ago
If we convert the metric to net income | Alphabet | 4 days 20 hrs 6 mins | | Amazon | 1 day 12 hrs 58 mins | | Apple | 0 day 18 hrs 14 mnins | | Meta | 18 days 17 hrs 19 mins | | Microsoft | 0 day 9 hrs 4 mins | Total: 26 days 5 hrs 40 mins
- hef19898 3y ago
  Congrats, you just discovered percentage calculation...
- ot 3y ago
  > Total: 26 days 5 hrs 40 mins What's the significance of adding up together the rows? Time passes simultaneously for all these companies.
  - Arcuru 3y ago
    That's how the article above does it for some reason, so it is consistent but I agree it makes no sense.
- bitshiftfaced 3y ago
  Thank you. There was really no reason for the author to use revenue instead of net income other than to make the problem they were reporting seem just a little bit worse.
amadeuspagel 3y ago
That's terrible. After all, the purpose of fines is to bankrupt companies for the emotional benefit of angry and resentful people, and not to discourage certain behaviour in proportion to how bad it actually is.
jpeeler 3y ago
Not to direct attention away from the issue at hand, but how do these collected fines get used? I can't help but wonder with such exorbitant sums of money if some organization secretly does not want these fines to go away...

207 points by spiros 3y ago

Either the fines need to be high enough until there is a material impact to shareholders, or natural persons who make decisions within the corporation needs to be held accountable (not just the legal person), OR, we need to fundamentally rethink what a corporation's charter must necessarily include (in addition to shareholder returns).

bilekas 3y ago
What is the pushback exactly against fining based on average yearly revenues ? The EU has been issuing fines to google as mentioned ($8 billion still owed) but I never understood why they can't simply charge a 20% of revenue within the EU. The fines are not to redeem some income for the EU, they're to deter bad actors. This is just not happening.
- orwin 3y ago
  Because they do montages to make their local revenue unknowable. Through clever use of debt and licensing.
  - disgruntledphd2 3y ago
    Not across the EU. They have to book EU revenue somewhere in the EU, so it's entirely knowable how much they make. This is also why the fines are based on revenue, to avoid transfer pricing shenanigans.
vnjxk 3y ago
Could you imagine adding additional fine to shareholders? Like a reverse dividend? I wonder what disasters or blesses this will cause
- bilekas 3y ago
  This SHOULD be the way as they are the ones who stand to gain the most. They should be the ones who lose the most if the actions of their responsibilities are nefarious.
  - Sai_ 3y ago
    Isn’t the share price getting decimated the punishment for shareholders?
    - bilekas 3y ago
      That would be but the miniscule fines don't have any effect on the share price ?
  - postingawayonhn 3y ago
    It would make it incredibly risky to be a non-management shareholder.
    - bilekas 3y ago
      But in turn it would incentivize some better practices to avoid risks of fines.. It wouldn't be risky if companies didn't act maliciously and ignore regulations etc.
- hliyan 3y ago
  That actually sounds like a remarkably elegant way to do it. We'll never know what the second order consequences could be until we try it. But I doubt they'll be as bad as what we're experiencing now.
- mschuster91 3y ago
  No. That would destroy the stock markets in an instant. The way it has always been is that with a classic stock, the only risk an investor has is the money they paid someone to acquire the stock. There exist other classes with actual post-buy liabilities, e.g. stock options, as one particularly unlucky poor sod discovered at the start of the 2020 plaguefest [1], but normally these are (supposed to be) heavily gated for actually qualified investors for precisely that reason. Personally, I'd keep it that way... and nationalize companies that can't pay their fees, without paying out the shareholders. That way, the shareholders get punished, the jobs created by the company aren't lost, and the government gains something of value. [1] https://www.forbes.com/sites/sergeiklebnikov/2020/06/17/20-year-old-robinhood-customer-dies-by-suicide-after-seeing-a-730000-negative-balance/ https://www.forbes.com/sites/sergeiklebnikov/2020/06/17/20-y...
bko 3y ago
Or, alternative explanation, the fines aren't meant to deter behavior but serve as a way of rent seeking, signaling by politicians and bureaucrats and capturing ever more regulatory authority by various groups
- BirAdam 3y ago
  It also serves as deterrent for smaller companies, and as regulatory capture occurs pulls the ladder up behind the big tech companies.
  - ethbr1 3y ago
    The fines aren't large enough to be materially impactful to governments. So if it's rent seeking, it's a poor job of it. I'd expect they're at the levels they are because laws atrophied during the 80s - 00s, and this is indeed the maximum remedy that can currently be sought. Providing for tighter penalty scaling with relation to company size would go a long way to fixing this, including for small firms.
  - janice1999 3y ago
    It's really the opposite. The EU in particular is seeking to curb the power of monopolistic big tech. The fines are in responsive to anti-competitive behaviour. Smaller companies should be happy.

rpmisms 3y ago

Instead of fines, it should be forced price reductions.

stetrain 3y ago
Wouldn't that hurt margins but also increase market power for these companies? Also how would it work if the product is already "free" to the consumer, ie Facebook or Google?
PinguTS 3y ago
Define price reduction for Meta, Alphabet.

djoldman 3y ago

This article makes a good point comparing the relatively small magnitude of fines paid to revenue earned. It follows that perhaps fines are not deterring. Perhaps a stronger deterrent would be injunction-based: companies found to be in violation of regulations and laws might be enjoined completely from operating in a commercial space. "One strike and you're out."

bilekas 3y ago
Isn't this one reason they use umbrella companies anyway ? IE: Meta Alphabet etc > and laws might be enjoined completely from operating in a commercial space. "One strike and you're out." They can just move the 'assets' of that bad actor to another one and continue as normal ?
vmfunction 3y ago
Fine for big corp are just cost of doing business. All the big corp have some money stashed away for that purpose. It is all about working out with the AG on what the fine will be.
SamuelAdams 3y ago
Revenue and profit are not the same though.
- piva00 3y ago
  Profit margin for Big Tech is absurdly big compared to most other industries though, it makes much less of a difference than for grocers or other industries with razor-thin margins.

charlieyu1 3y ago

Day 7 is 2% of the year. Is it not enough deterrent? If my portfolio is missing 2% growth per year I’d be pretty worrying

atorodius 3y ago
Thet is not the same. it would be eg if you target 10% growth, the fines would be 2% of that so 0.2%
- charlieyu1 3y ago
  It is though, instead of getting $100 they are now only getting 98% because they miss 7 days of revenue. And actually it is going to be much worse because we haven’t deducted operating costs to find profit
zanellato19 3y ago
Only if this growth hadn't accelerated because of the actions that caused the fine. If those actions caused you a 10% increase, then 2% is nothing.
globular-toast 3y ago
Evidently not. But I'm not sure if such fines are supposed to be a deterrent or supposed to be to pay to fix the damage done. Somehow I think they are even further from covering the latter.

freitzkriesler2 3y ago

This literally doesn't matter. these fines are literally "fun taxes" to deep pockets. Make them hurt otherwise it won't stop.

spiffytech 3y ago

Should this be measuring against profit, not revenue? Edit: "This" meaning the claim that they've made enough to pay back fines, not how those fines are decided.

shanehoban 3y ago
If the fines would impact profits in a significant way, the companies would just ensure they have no profit on paper going forward.
- bko 3y ago
  I didn't know companies can just ensure they have no profit on paper. Why don't they do that now and not pay corporate taxes? Why is it dependent on fines?
  - fifteen1506 3y ago
    No clue on your specific question. However it is a known practice. Most Hollywood studios do it. That's why actors which claimed a percentage of profits of the movie would get $0.
    - waffleiron 3y ago
      https://en.wikipedia.org/wiki/Hollywood_accounting https://en.wikipedia.org/wiki/Hollywood_accounting Handy wikipedia link
    - deleted 3y ago
      [deleted]

bitshiftfaced 3y ago

Shareholders care more about net profit than revenue. Using revenue makes the number more clickbaity. Also, you claim this isn't a deterrent, but you don't explain why. How do we know that tech companies weren't just well-behaved last year? Or, should one week's revenue never ever be able to pay off a company's past year's fines, and we should always assume tech companies are more evil than that?

devsda 3y ago
They were fined for breaking laws and them making a profit out of the act is irrelevant and secondary(though its the main driver). If profit is the only benchmark then companies can use some creative accounting practices to reduce their exposure.
deleted 3y ago
[deleted]
rollcat 3y ago
I have a simple and very fair solution to that problem: make each consecutive fine for a repeated offense grow exponentially. If you make an honest mistake (or even are just testing the waters to see what you can get away with), the fine should be bearable. But being able to treat fines as just cost of doing business will indeed lead to a world where nothing is ever wrong or immoral, as long as you keep making money.
arghwhat 3y ago
Profit is an easier number to manipulate than revenue through expenses and liability. E.g., by increasing expenses to executive salaries and by investing huge sums in growth projects or new strategies. For large companies, particularly those where investors prioritize growth, cash flow is often more interesting than profit.
- bitshiftfaced 3y ago
  Oh I agree that if you're going to fee based on something, revenue is better than profit. My post wasn't trying to say otherwise. It's just that I don't believe it makes sense to gauge how fast companies pay off the fee in terms of revenue, such as was done in the article.

jongjong 3y ago

The concept of a corporation is fundamentally unjust. It doesn't make sense that there are entities which have more rights than people. If I do a crime, I go to jail. If a corporation does a crime, they only need to pay a small fine. Not to mention that they have many thousands of people working for them doing crimes on their behalf for which are never caught and never punished. Just the scale of a corporation, makes it impossible to prevent crime. They are crime factories by design. If a nation state kills someone, it's not called murder. If a corporation commits fraud, it's not called fraud... So long as they don't run out of money. Corporations can influence laws in ways that I can't. I can't even talk to a politician. Corporations have far better access to government contracts and the tender process than regular citizens. There is subtle, but harmful corruption constantly taking place behind the scenes. Not only that, but the people who work for corporations are, to some extent, shielded from the crimes that they commit on behalf of corporations as it limits their liability by design, not to mention all the opportunities for cover ups and deflection of liability that they provide. It absorbs and neutralizes liability. Nobody ends up taking responsibility. The crimes keep getting more frequent; corporations keep finding people who are more and more desperate and willing to commit crimes on their behalf. People create shell companies just to launder borrowed money to corporations, in the hope that they will get a well paid corporate job from them after their shell company runs out of money... The list of schemes/crimes is endless and beyond my imagination. The first corporations ended up bankrupt. E.g. Both Dutch and British East India Company, South Sea Company, Mississippi Company... They ALL turned into bubbles and collapsed spectacularly, every single time. That was before the fiat monetary system came along and started propping them all up... Now the scam never ends. The entire economy is fully monopolized by these proven scam constructs. They suck up all opportunities and produce cheap, low quality products... but because they take away opportunities from everyone, nobody who isn't a corporate shareholder has surplus income and are therefore forced to buy cheap, low quality corporate products.

boeingUH60 3y ago
> If I do a crime, I go to jail. If a corporation does a crime, they only need to pay a small fine. Many corporate executives have gone to prison for crimes they committed while working. > Corporations can influence laws in ways that I can't. I can't even talk to a politician. You can talk to a politician if you bother to call or email their office. Stop being obtuse. > Corporations have far better access to government contracts and the tender process than regular citizens. There is subtle, but harmful corruption constantly taking place behind the scenes. You want individuals to bid directly for government contracts? > Not only that, but the people who work for corporations are, to some extent, shielded from the crimes that they commit on behalf of corporations as it limits their liability by design. It absorbs and neutralizes liability. Nobody ends up taking responsibility. The crimes keep getting more frequent; corporations keep finding people who are more and more desperate and willing to commit crimes on their behalf. Opinion, not fact. Maybe you're complaining they should be held more accountable, which is valid. But working under a corporation can't prevent anything if the DOJ decides to go after the individual perpetrator. Thanks for falling for the author's clickbait though..

iamleppert 3y ago

The fines should be measured in units of time, not % of revenue, or some fixed dollar number. All other measures can be gamed, except time. For example, Meta would think twice about violating privacy if they were suspended from doing business for a month, or their fine amounted to a month of revenue with definite start and end dates. We already do the same thing with people (taking away their freedom for lengths of time), it’s time to have the same punishments for corrupt corporations. Shutting down their operations completely for lengths of time would also have other consequences besides financial.

LeafItAlone 3y ago
Is that not just also harming (again) their customers?
dusted 3y ago
Indeed, money is a condensate of time.
lettergram 3y ago
As a citizen I don’t want government taking away my ability to communicate with family because my government wants some access controls. I’m all for punishing companies. An easier solution is to combine fines with criminal penalties on citizens who break the laws. Ie if you work for a company and spy on someone, you go to jail as if you didn’t work for the company.
diggan 3y ago
> The fines should be measured in units of time, not % of revenue Why not just increase the percentage so it's no longer profitable to break laws? If say Meta was found to violate users privacy and illegally gained a 5% extra net revenue because of it, fine them 10x of what they gained, so 50% of the revenue. I'm fairly sure they'd start moving fast without breaking things if that was the case.

kmlx 3y ago

from the article: > As of seven days and three hours into 2024, they had already earned enough revenue to pay it all off. revenue is not the same as profit. this is basic stuff. from the same article: > Still, revenue is a more accurate depiction of a company’s size and profitability. it seems like this is rookie hour. then we look at the author's previous posts: https://proton.me/blog/big-tech-ipef https://proton.me/blog/big-tech-ipef With new trade deal, Big Tech wants to be above the law https://proton.me/blog/big-tech-bigger-fines https://proton.me/blog/big-tech-bigger-fines Why we need bigger fines for Big Tech got it. there is an axe to grind.

hef19898 3y ago
The moment people fail to differentiate between revenue and profit, one can safely ignore the rest of the article.
- anticorporate 3y ago
  I don't think TFA failed to differentiate revenue and profit, though. I think the point is these companies have enough revenue to pay off the fines, and 358 days to return to profitability for the year, even starting out with an operating loss.
  - hef19898 3y ago
    And now you are mixing free cash flow, with revenue, with profits...
    - ethbr1 3y ago
      Instead of bikeshedding, you might suggest an alternative time-vs-income-based measurement that you think is better? It's obviously not profit, which it would be crazy to "require" to pay fines when looking at companies. So what would you suggest using as a meter stick?
      - 3y ago

tokai 3y ago

The only way to tackle this is to put leadership in prison. If that is not possible give them the oligarch experience; frozen assets, interpol warrant, etc. It makes no sense that breaking the law gives milder consequences just as long as your crime is transnational and very extensive in scope.

Chris2048 3y ago
Why not higher fines? % of profit that increases each time?
- anticorporate 3y ago
  Once you reach a certain level of wealth, fines are no longer consequential. When you can restructure both your corporate and personal assets to span multiple countries with different regulations and poor cooperation, you've effective avoided them.
  - hiq 3y ago
    What about the 4% of the global turnover of a company as mentioned in https://gdpr-info.eu/issues/fines-penalties/ https://gdpr-info.eu/issues/fines-penalties/?
    - anticorporate 3y ago
      If it were effective, we wouldn't all endure daily GDPR violations. But we do.
      - Chris2048 3y ago
        Non-enforcement is a different issue to fines being too low.
        anticorporate 3y ago
        They're related, though. A portion of fines fund enforcement activity. (IMHO, a higher portion should go to enforcement. Right now way too much goes into general funds.)

postingawayonhn 3y ago

Isn't this to be expected? I probably made enough money to pay all my 2023 fines by midday on January 1st.

lakomen 3y ago

Revenue isn't profits

nickysielicki 3y ago

It's so easy to tell when Europe is voting on a post versus the US. Fines against these companies are predominantly rent seeking. You should be extra suspicious when the fines are coming from countries where they don't have offices. FTA: > Big Tech companies can further water down the potential sting of these fines by delaying payment for years(new window). They’ve done this by filing appeals, counter-suing, or simply refusing to pay. Some notable examples include: Sorry, but I give the companies the benefit of the doubt here: they have good legal teams and don't generally fight things when they can't win. Fighting these fines isn't evidence that big tech is evil and refuses to follow the low, it's evidence that these countries are rent seeking by charging them bogus fines, which their world-class legal teams (rightly) contest.

hef19898 3y ago
Thr EU is fining EU based companies as well. And all Big Tech companies have offices in the EU. The way proper legal systems work, is both sides litigate a case if they see a chance of winning it, goes for both involved parties. As much as big tech isn't per-se evil for having to pay fines, the governments involved aren't rent seeking...
arp242 3y ago
> You should be extra suspicious when the fines are coming from countries where they don't have offices. They're doing business in these countries, and making a profit from that. Where they do or don't have an office isn't that important: it's about who they're doing business with. And it's really very simple: "obey the law or sod off". If you think that's too much bother then that's completely fair – no hard feelings. Just don't do business then.
- nickysielicki 3y ago
  > Where they do or don't have an office isn't that important: it's about who they're doing business with. It's important because it frames the lawsuit. If the company has a large presence in the country and is employing thousands of high-earning tax payers and leasing expensive offices, then the governments are not likely to bring frivolous fines against the company for no reason. On the other hand, if the company is making money and not paying anything back into their economy, the government has nothing to lose by attempting to extort them. > And it's really very simple: "obey the law or sod off". If you think that's too much bother then that's completely fair – no hard feelings. Just don't do business then. It's completely arbitrary in a lot of these cases. India fining Google $161m for smartphone market dominance and demanding specific remedies like not installing Google Chrome, YouTube, and Google Maps? How the hell was Google supposed to anticipate that? Almost all of these in the table are like this. France fining Microsoft $64m (!) because their advertising cookie opt-out flow was not deemed clear enough? It's not that the flow didn't exist, mind you, it's that the button wasn't on the same page as the "accept cookies" button. Where in French or EU law does that exact requirement exist?

bmulyadi 3y ago

hef19898 3y ago
Congrats, you just discovered percentage calculation...
ot 3y ago
> Total: 26 days 5 hrs 40 mins What's the significance of adding up together the rows? Time passes simultaneously for all these companies.
- Arcuru 3y ago
  That's how the article above does it for some reason, so it is consistent but I agree it makes no sense.
bitshiftfaced 3y ago
Thank you. There was really no reason for the author to use revenue instead of net income other than to make the problem they were reporting seem just a little bit worse.

amadeuspagel 3y ago

That's terrible. After all, the purpose of fines is to bankrupt companies for the emotional benefit of angry and resentful people, and not to discourage certain behaviour in proportion to how bad it actually is.

jpeeler 3y ago

Not to direct attention away from the issue at hand, but how do these collected fines get used? I can't help but wonder with such exorbitant sums of money if some organization secretly does not want these fines to go away...