One of the key issues is that illegal behavior by these companies almost never leads to the prosecution of decision makers. This way reckless and monopolistic actions can go unchecked and occasional fines are simply factored in as operating costs.

Agree Because those companies are public the fine might have greater impact But overall, when you know you can pay the fine, you are less afraid to take those risks

You can compare it to entrepreneur from a wealthy family

He can take risks, knowing that if he fail, it won't be to the ground

It's not only the fine, it's the bad publicity those companies get when getting the fine

Damage to their brand worth billions

Cambridge analytica scandal costed FB a lot more then the fine

It cost them in their users trust

and that's the worst kind of punishment a large brand such as facebook can get

All fair points, but I wouldn't exactly call damage to brand reputation the single worst punishment a corporation can get though. Can easily think of an infinite number of worst punishments.

I guess there is a parallel with actual people. Personal reputation matters, but surely we need to be a bit more harsh when punishing certain behaviour.

The worst kind of punishment is if Mark Zuckerberg went to jail and every media was broadcasting him in handcuffs.

It would have sent a strong message to other CEOs. Don’t fuck with people’s data.

But that seldom happens. It’s US, the rich rule the country.

> I think one of the key issues is that illegal behavior by these companies almost never leads to the prosecution of decision makers

I think, despite the title, this isn’t actually a criminal case. It’s Google taking advantage of that Irish tax loophole.

It's not just Google, it's the same for pretty much every big corp.

Every time a fine or an agreement is made, their stock goes up and the execs throw a party.

Investors don't like open litigations. It suppresses the stock price until an agreement is reached. And it has to be listed on filings with the potential highest losses. Google could have in their filings this is a 10B liability. And then they realize it's just 1B so naturally the stock goes up.

A Ferrari parking ticket probably wouldn't get anywhere near 1% of its owner's annual income though?

A Ferrari driving fast in Switzerland though gets much more than that...

That model is used in some countries, such as Finland, with a famous case being a Nokia executive (back when they still mattered).

But it can get towed. Like a person would if caught with fiscal fraud.

So then it's not similar to a Ferrari getting a parking ticket, right?

What's even crazier is that their actions probably lead to a profit of more than $1B.

So it's like me doing something illegal and profiting $100k, but then getting fined $50k. I'd be stupid not to do it again. And again. And again.

At a minimum, the fine should be 2x the amount gained.

The enforcer's problem is that they might inadvertently make it worthwhile for unfavorable things to happen to the enforcer, such as:

- Making it more profitable for the company to just leave your market completely, underservicing everyone there immediately

- Creating an actual monopoly with costlier and poorer service when the policed company exits the market (either from leaving or being dissolved - the latter not applying to Google in this case)

- Creating an incentive to actually challenge the authority in court. Exponentially raising the cost for enforcement and not guaranteeing any favorable outcome.

- And as a corollary to the court, the challenge of authority can result in all the enforcement tools being declared invalid, including the charter for the enforcement agency itself! Resulting in a big public sector layoff and void in enforcement capability.

Yeah the court challenge is the big issue here.

Google haven't done anything illegal. The so called "loophole" in the law is actually the way the law was explicitly designed to work. If France pushed this too far Google might win and France would be left with nothing

The people cheering for France here are really just cheering for the end of the rule of law. Google pays little tax in France because it's not a French company, not because of "loopholes".

It's basically a tariff.

There is no European tech company that's going to compete with Google. They could ban Google entirely and the result would be Baidu etc. coming in and doing the exact same things.

Not to say we have any real contenders, but it’s difficult to compete with Google when the French company pays 33% corporate tax while Google pays significantly less

To the best of my knowledge the corporate tax in question is a tax on income, rather than revenue.

Any would-be competitor to Google is going to want to plow most/all of their revenue back into growth for years, perhaps over a decade. VC funded companies normally lose money so they can grow faster.

Once you're making money, yeah that's kind of a big sucking hole you want to deal with. But that's a political issue that other EU members states have with Ireland (and Luxembourg, and the Netherlands).

Why? America has historically had very high corporate tax rates relative to the rest of the world, that's what trump's tax reforms fixed. This idea in Europe that Google lives in a low tax environment is really very wrong. Their effective rate had historically been somewhere in the upper 20 percent ranges, no?

Certainly, tax is not the reason there are no Google competitors from France.

Fines are meant as a warning. If you impose a 50bn fine then every other company out there will start having second thoughts about entering the EU market. Lobbying will skyrocket and a lot of things could stale or worsen for the economy as a whole.

>If you impose a 50bn fine then every other company out there will start having second thoughts about entering the EU market.

Yes, don't enter the EU market if you want to dodge taxes. More countries should be enforcing this..

> Fines are meant as a warning

Fines are a deterrent and punitive measure. They punish you for doing something and make you hesitate to do it again. If these 2 goals aren't reached than the fine isn't really effective.

If they were a warning then you'd expect the second offense to be punished by some action that can make the fine feel like "just" a warning. What's that action? How effective is a string of endless warnings that are never followed up with real action?

One way would be to implement a series of exponentially growing fines. This would make them less "cost of doing business" and more "massive liability".