Big Tech has already made enough money in 2024 to pay all its 2023 fines
Fines imposed on major tech firms for privacy, antitrust, and other violations are so small relative to their revenues and profits that many see them as just a cost of doing business rather than a real deterrent. Commenters debate how penalties should be structured — for example, as a percentage of revenue, escalating for repeat offenses, temporary bans on operating, or even criminal and personal liability for executives — and whether shareholders should ever be directly on the hook. Others question the framing of the problem itself, arguing that focusing on revenue instead of profit is misleading and that some regulators may be engaging in rent-seeking rather than effectively protecting consumers or markets.
Adequacy and Purpose of Fines
- Many argue current fines are too small for Big Tech and function as “cost of doing business,” not deterrents.
- Some see fines as aimed at deterrence; others suspect they often act as political signaling or low-grade rent-seeking by governments.
- There’s concern that repeated violations (e.g., privacy, antitrust) show fines are not changing behavior.
What to Base Penalties On: Revenue, Profit, or Time
- Strong support for basing fines on revenue, not profit, because profit is easily manipulated via accounting, transfer pricing, and reinvestment.
- Critics counter that using revenue to talk about “how fast fines are paid” confuses revenue with profit and shows weak financial literacy.
- One commenter recalculates using net income, showing fines still equal only days or weeks of profit.
- Proposals:
- Larger, possibly exponential fines for repeat offenses.
- Fines as a fixed % of (global or regional) turnover.
- “Time-based” penalties: temporary suspensions from operating equal to some fraction of annual revenue, analogous to prison time for individuals.
Who Should Bear the Cost: Shareholders, Management, Workers
- Debate over fining shareholders directly (e.g., reverse dividends, per-share liabilities at sale):
- Proponents say shareholders gain most; they should lose when companies act illegally.
- Opponents say this effectively abolishes limited liability, would wreck stock markets, and punish uninformed pension savers.
- Many prefer targeting executives and directors personally (civil and criminal liability, “oligarch experience,” possible jail time), arguing they either knew or were negligently ignorant.
- Concern that massive corporate fines ultimately hurt rank-and-file workers and consumers via layoffs or higher prices.
Corporations, Limited Liability, and Justice
- One side calls the corporate form fundamentally unjust, a “liability shield” enabling large-scale, low-accountability crime and political capture.
- Others argue corporations and limited liability are core to modern prosperity and large-scale coordination; the problem is weak enforcement and taxation, not the basic concept.
- There is discussion of historical high marginal/wealth taxes vs today’s lower effective rates and their role in inequality.
Enforcement, Jurisdiction, and Rent-Seeking
- Some see EU and other non-US fines as necessary checks on monopolistic behavior and privacy violations.
- Others see many foreign fines (e.g., over Android bundling or cookie banners) as arbitrary or extortionary, especially where companies have little local footprint.
- Under-enforcement is highlighted: high theoretical GDPR-style penalties exist, but violations are seen as widespread, and actual enforcement capacity is limited.
- Point raised that fine proceeds can and should help fund enforcement, but often go into general budgets.
Alternatives and Structural Ideas
- Suggestions include: nationalizing firms that can’t pay; invalidating patents as punishment; doubling fines for repeat violations; tying penalties to specific illegal revenues (though seen as hard to quantify).
- Some favor restoring a more competitive “marketplace of apps” by curbing gatekeeper power rather than relying solely on large fines.
Critiques of the Article and Framing
- Several commenters criticize the article’s focus on revenue-days as misleading and “clickbaity,” and note its alignment with a privacy/VPN company’s marketing interests.
- Others respond that, despite imperfect framing, the core point stands: relative to Big Tech’s scale, current fines are too small to bite.