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Because you create a loophole where non-profitable companies commit the offense and get cash back (if fines were connected to revenue, negative revenue would be

by ipaddr 2y ago

Because you create a loophole where non-profitable companies commit the offense and get cash back (if fines were connected to revenue, negative revenue would become a reward)

jedberg 2y ago
Obviously you would have a floor, just like taxes do.
- Brybry 2y ago
  Yep, plenty of fines work this way. It's how GDPR works: percent of turnover (revenue) or a floor, whichever is higher [1]. And worst case scenario define revenue in the fine's terms in a way that it disallows accounting tricks. [1] https://gdpr-info.eu/art-83-gdpr/#:~:text=turnover https://gdpr-info.eu/art-83-gdpr/#:~:text=turnover
  - lupire 2y ago
    That the max fine for GDPR, not the min. GDPR is really a "fine whatever they want" regime, starting small and increasing for non compliance.
    - Brybry 2y ago
      > up to 20,000,000 EUR, or in the case of an undertaking [economic entity], up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher I think the "whichever is higher" wording does make it a floor but you're right that the "up to" makes it whatever they want. So I guess it's a meaningless variable floor. It still works out similarly: they could fine a company like Amazon, with a lot of revenue, up to around 21 billion (regardless of profit) while they could only fine a small company up to 20 million.
erikaww 2y ago
You can’t have negative revenue or if there is some obscure definition, just handle that edge case
ThunderSizzle 2y ago
If fines were tied to revenue, then non-profit wouldn't stop the fine. If you had $1200 in revenue, and $1000 in expenses, the fine could be calculated against rhe $1200, which is exactly what non-companies have to do. And it would make sense to be revenue-based, as opposed to profit-based.
insane_dreamer 2y ago
we're talking about it being tied to __gross__ revenue, not net revenue (profit)

by ipaddr 2y ago

Because you create a loophole where non-profitable companies commit the offense and get cash back (if fines were connected to revenue, negative revenue would become a reward)

jedberg 2y ago

Obviously you would have a floor, just like taxes do.

Brybry 2y ago
Yep, plenty of fines work this way. It's how GDPR works: percent of turnover (revenue) or a floor, whichever is higher [1]. And worst case scenario define revenue in the fine's terms in a way that it disallows accounting tricks. [1] https://gdpr-info.eu/art-83-gdpr/#:~:text=turnover https://gdpr-info.eu/art-83-gdpr/#:~:text=turnover
- lupire 2y ago
  That the max fine for GDPR, not the min. GDPR is really a "fine whatever they want" regime, starting small and increasing for non compliance.
  - Brybry 2y ago
    > up to 20,000,000 EUR, or in the case of an undertaking [economic entity], up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher I think the "whichever is higher" wording does make it a floor but you're right that the "up to" makes it whatever they want. So I guess it's a meaningless variable floor. It still works out similarly: they could fine a company like Amazon, with a lot of revenue, up to around 21 billion (regardless of profit) while they could only fine a small company up to 20 million.

erikaww 2y ago

You can’t have negative revenue or if there is some obscure definition, just handle that edge case

ThunderSizzle 2y ago

If fines were tied to revenue, then non-profit wouldn't stop the fine. If you had $1200 in revenue, and $1000 in expenses, the fine could be calculated against rhe $1200, which is exactly what non-companies have to do. And it would make sense to be revenue-based, as opposed to profit-based.

insane_dreamer 2y ago

we're talking about it being tied to __gross__ revenue, not net revenue (profit)