Gross. Can we start making fines meaningful? % of revenue maybe? I’m not an expert on this. But these fines should be more than enough to discourage behavior and not be “cost of doing business”.
this post was submitted on 14 Jan 2024
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The EU knows fines of 'up to' 4% of revenue for privacy violations, which means the company still gets to keep 96% of whatever it's made by breaking the law. The fine should be a minimum of 50%, plus jail time for the managers responsible. Any punishment that does not make the shareholders cry with fury is too low and will do nothing to change the situation.
No, they don’t get to keep 96%. It is revenue, not profit. That is a big difference.
I'm well aware of the difference (see my other posts). But it still means that even with the maximum fine, a revenue of 100 billion is still a revenue of 96 billion. Even with an unrealistically low profit margin of 10% it was still worth it to them.
We need a total revolution. The people who ought to be fined are the ones buying the laws.
Total revolutions tend to eat their children. Those who are already the most vulnerable in the old system tend to be in the most precarious situation in the new one as well. What we actually need is careful and gradual reform, based on democratic principles, instead of revoluzzers imposing their will upon the rest of the population, which is how most revolutions end.
My country is literally an oligarchy, not a democracy. The oligarchs don't want to gradually reform based on democratic principles. But they sure want us to think they will.
Revenue is the wrong metric for this type of comparison. Last I heard even big tech didn't have a profit margin of 100%.
I don't know, a percentage of revenue hurts more than the same percentage of net profit. Maybe some companies need to be forced to operate at a net loss until they clean up their act.
I'm not arguing about the fines themselves, those can indeed be scaled by revenue. I also agree that many fines should be higher to prevent companies from merely seeing them as an operating cost.
However, my point is that company revenue can't be used 1:1 to pay off fines. That doesn't take into account that revenue also has to cover all other operating expenses and taxes. As an example, the article states that Meta would take roughly 5½ days to pay off its fines, but taking the 23.42% profit margin into account a more realistic answer is 23½ days.
You're making good points and I think we're on the same page. I agree that revenue does not equal profit, I just want the fines to be as high as possible.