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Why are fines not tied to a percent of revenue for a given time period? These flat-fee fines look big to the little folks but typically are pocket change for t

Why are fines not tied to a percent of revenue for a given time period? These flat-fee fines look big to the little folks but typically are pocket change for these big companies, it should actually hurt (see punishment) when they do something wrong.

chimeracoder 12y ago
It's not like there isn't precedent for percent-revenue-over-time penalties in the law (albeit perhaps not by the FCC). For example, Google was ordered to pay 1.36% of AdWords revenue to Vringo[0] (though this was later overturned). [0] http://arstechnica.com/tech-policy/2014/01/court-orders-google-to-pay-1-36-of-adwords-revenue-for-infringing-patents/ http://arstechnica.com/tech-policy/2014/01/court-orders-goog...
eli 12y ago
But it's not a flat fee. According to the FCC, it's actually the largest fine ever for misuse of data for marketing purposes.
- delecti 12y ago
  This works out to ~$4 per affected customer. The issue is that they advertised other Verizon services to customers without giving them an option to opt-out. They effectively paid $4 per sales lead, and for leads to customers they already did business with, that's a pretty phenomenal deal considering the breadth of services they could then try to sell. Figure 1/10 of those customers got a $10 monthly service and kept it for a year. That's $24m in revenue on a conservative estimate.
  - eli 12y ago
    I agree in principle with the idea that the fine should always be more than the potential profit, but I think it would be really hard to implement such a rule. Anyway, I don't agree with your math. Surely many/most of the affected customers would not have bothered opting out even if they had been given proper notice. Opting out is kind of a hassle. And a 10% sales conversion is ridiculously generous by like three orders magnitude. I'd be surprised if 10% of people even open their messages.

chimeracoder 12y ago

It's not like there isn't precedent for percent-revenue-over-time penalties in the law (albeit perhaps not by the FCC). For example, Google was ordered to pay 1.36% of AdWords revenue to Vringo[0] (though this was later overturned). [0] http://arstechnica.com/tech-policy/2014/01/court-orders-google-to-pay-1-36-of-adwords-revenue-for-infringing-patents/ http://arstechnica.com/tech-policy/2014/01/court-orders-goog...

eli 12y ago

But it's not a flat fee. According to the FCC, it's actually the largest fine ever for misuse of data for marketing purposes.

delecti 12y ago
This works out to ~$4 per affected customer. The issue is that they advertised other Verizon services to customers without giving them an option to opt-out. They effectively paid $4 per sales lead, and for leads to customers they already did business with, that's a pretty phenomenal deal considering the breadth of services they could then try to sell. Figure 1/10 of those customers got a $10 monthly service and kept it for a year. That's $24m in revenue on a conservative estimate.
- eli 12y ago
  I agree in principle with the idea that the fine should always be more than the potential profit, but I think it would be really hard to implement such a rule. Anyway, I don't agree with your math. Surely many/most of the affected customers would not have bothered opting out even if they had been given proper notice. Opting out is kind of a hassle. And a 10% sales conversion is ridiculously generous by like three orders magnitude. I'd be surprised if 10% of people even open their messages.