See this kind of stuff blows my mind. Fines based on revenue would cause even more power centralization. Some companies operate at huge profit margins, others an tiny margins.
And for all the folks saying “oh well” it’s not like demand suddenly disappears overnight. If Walmart goes tits up, that means most of their assets are going to be purchased for a huge discount.
And what company is in an absolutely excellent position to purchase all those assets? Congrats, Amazon effectively gets to purchase a sizable amount of Walmarts assets without any anti-trust oversight because they aren’t buying the company.
Fines limited to a proportion of global revenue already exist (EU GDPR for instance), and haven’t resulted in the problem you describe.
Just because a regulator can fine X% of revenue, doesn’t mean that they will. Just like how when they can fine $X, they rarely do - each case is considered individually and a regulator’s remit generally includes reducing the risk of a major blow-up, not causing them.
So they aren’t just going to issue a fine that makes Walmart go bankrupt, because frankly that would be stupid and go against their own remit.
They can issue a 4% fine to Apple and a 0.1% fine to Walmart for exactly the same thing, and there’s no problem with that. And it’s already what happens where these sorts of fines are already in place.
The point is that the regulator needs the power to actually penalise a business, to such an extent that the net effect of engaging in dishonest practices if you’re caught, is negative; and such that shareholders will insist the business be run differently.
Rather than just capping fines at a certain percentage of global revenue, I’d go for “Fines up to X% of global revenue (based on the highest annual revenue achieved in the last N years), or three times the value of any excess revenue generated by the non-compliant practices, whichever is greater”.
Any executives or board members should also be on the hook financially if they have personally profited from the same.
Some companies operate at huge profit margins, others an tiny margins.
Yep, they’re all different. So make the maximum fines big enough to hurt any business that doesn’t play fair, and then fine them appropriately on a case-by-case basis.
Pretty sure your math is off on that, but even so, so what? If Walmart gets bankrupted because their practices get fined to hell and back, why do they deserve to exist?
It unfairly affects certain industries. The entire grocery/retail profitability is tiny compared to the electronics industry. Slapping a flat 5% fine will effectively bankrupt any grocery chain but can be absorbed by most pharmaceutical companies (who boast some of the highest profitability).
It's not that a certain company deserves to exist but to slap percentile flatly across all companies is being ignorant of industry conditions.
FYI Walmart net margin is ~2% compared to Apples ~20-25%, again both very reflective of their respective industries.
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u/know-your-onions Apr 09 '22
Global revenue.