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It is indexed, just not to the damages, but to the revenue of the guilty party.

Other countries in the EU do this as well, even in personal matters. For instance, a speeding ticket is based off a percentage of your annual income. Why? Because if you make $200k a year, a $50 fine isn't a big deal, at all, but if you barely scrape by, $50 could break your budget for the month.




First, the vast majority of the world does not use the day-fine system. But more importantly, it makes no sense to index corporate fines to a firm's revenue because corporations can be split/combined (unlike people). Indexing fines to firm size would lead to market distortions, especially in the case when those fines are a significant fraction of total revenue.


At this point it might actually make sense for Google to create a separate European entity so they won't get fined so heavily all the time in the EU. I guess they'd have to see how much of a benefit that would be relative to the amount of taxes they would save by being in Ireland (I'm not sure if that's still a thing).


The fine is already based on Google's European (not global) ad revenue as someone else quoted in the comments.


Google has already started the process of splitting to a Google EEA.

They sent notices recently about a transfer of data custodianship to GSuite customers.


Google isn't a single person. They're already more likely violate some laws and regulations just because they're so big. You can't double dip by treating every small infraction like it's a huge company-wide problem.


Too Big To Be Accountable ??????


Since when does accountable mean being fined over $1 billion? It is beyond absurd. If Waymo gets a speeding ticket in Europe, should it also be for $1 billion? At least the speed limit is a clearly defined rule. Selectively enforcing an arbitrary definition of "anticompetitive" is not.


> Why? Because if you make $200k a year, a $50 fine isn't a big deal, at all, but if you barely scrape by, $50 could break your budget for the month.

That makes no sense. If you're stealing $50 then a $150 fine is a deterrent even if you're a billionaire, because the expected value if you're caught is -$100, which has nothing at all to do with how much money you have.

And if that caused the billionaire to not care, that's great. If I got $150 every time someone stole $50 from me and that didn't deter them, I'd start researching how to get them to steal more money from me because it's so profitable to me. If they're willing to pay that much more than something costs, at that point you're just selling it to them and deterrence is not desired because the transaction is apparently net positive to both parties.

Moreover, it seems that you're suggesting that someone with $0 income and $0 assets then should have a <=$50 fine because it's all they can afford? That's the thing that really wouldn't serve as a deterrent, in a problematic, net negative consequences sort of way.


You are missing the point.

Google does not just steal money which we get back with a fine and thats it.

It drives competitors out of the market and that causes damage to the economy and is against the interests of the population where they do business.

They should make the Managers personally liable.

If you think about it 1.5 Billions is laughable for a company like Google, its only money which they have plenty from. Nothing will change.


>If you think about it 1.5 Billions is laughable for a company like Google, its only money which they have plenty from. Nothing will change.

Just because they have a lot of money doesn't mean they are okay with losing a bunch. As long as the fine amount, adjusting for the probability of the fine, is higher than benefit Google attains by breaking the law it will act as a deterrence.


> Google does not just steal money which we get back with a fine and thats it.

> It drives competitors out of the market and that causes damage to the economy and is against the interests of the population where they do business.

That's the same thing. The harm can be measured in money and a proportional fine imposed. That is no argument for the fine to be proportional to total revenue rather than having any relationship to the harm itself.

> They should make the Managers personally liable.

At which point the "manager" is compensated by the company or its liability insurance for whatever retribution the government takes on them as an individual, and it's still the company paying regardless.

> If you think about it 1.5 Billions is laughable for a company like Google, its only money which they have plenty from. Nothing will change.

I don't know about that. In the US the tech companies used to mostly ignore Washington, until it stopped ignoring them. Now they're some of the biggest spenders on lobbying.

That would take a different form in Europe because the laws are different, but if you're not expecting this to lead to some variant of "money buys influence" you're likely in for a surprise. So it will likely change that at least.

Which is another reason proportionality is important. If preventing a $1M fine is worth spending $1M on lobbying then preventing a series of multi-billion dollar fines is worth...


> If you're stealing $50 then a $150 fine is a deterrent even if you're a billionaire, because the expected value if you're caught is -$100, which has nothing at all to do with how much money you have.

This is not true if you see $50 and $150 dollars as basically the same amount when compared to your overall wealth. Would you care about a 2 cent fine for overrunning you time on a 1 cent parking space?


> This is not true if you see $50 and $150 dollars as basically the same amount when compared to your overall wealth. Would you care about a 2 cent fine for overrunning you time on a 1 cent parking space?

At which point you can be happy that the rich person is voluntarily paying the 3 cent fine instead of the 1 cent parking fee.

If you made it a $1000 fine vs. a 1 cent parking fee then they would pay the parking fee, but how is that actually better? You convinced them to spend more of their time keeping track of how long they had before having to put money in the meter and as a result you ended up with less money. Net loss to everyone.

Meanwhile now you're creating a bunch of perverse incentives for rich people to register their cars in someone else's name or waste thousands of man hours on both sides to contest an ordinary parking fine, and creating a bunch of perverse incentives for governments to pass vague, misleading, counterintuitive or impossible to comply with laws so they can jump out of the bushes and impose massive fines on anyone who walks by with money in their pocket.


A normal fine simply becomes "the cost of doing business". The point is to deter Google, not to simply add a cost to its activities.

Related links:

https://rady.ucsd.edu/faculty/directory/gneezy/pub/docs/fine...

NYT: https://www.nytimes.com/2005/05/15/books/chapters/freakonomi...

NPR: https://www.npr.org/2008/03/31/89233955/dan-ariely-takes-on-...


A fine is a price -- exactly. So why are you trying to deter them from doing something which they're willing to pay you more to let them do than it costs you to let them do it?

Or if the fine would be lower for some other company with less money, then why are you willing to let that other company pay less to do it than it costs you to let them do it?


The daycare owner didn't want $10, he wanted to go home at 4pm.

You're missing the forest for the trees.


> The daycare owner didn't want $10, he wanted to go home at 4pm.

Then he should have set the late fee to as much as the amount he wanted to go home earlier. Which would still be the same amount for every parent regardless of how much money they had, because which parent is late has nothing to do with how much he values not being able to go home on time.


So you set it to $1000. Now the parents are still late and also argue about the insane fine, so you get no money and end up staying later than you would have anyway arguing with the parents.

How about instead of a fine you give the kids to CPS. You go home on time, the late parents never come back, or if they do they're never late again, and you win.

I guess the point is that monetary punishments don't seem to work when companies can consider it as 'cost of doing business.' If we start taking away the company's hypothetical metaphorical children when they're late to pick them up then they have a reason to listen.


> So you set it to $1000. Now the parents are still late and also argue about the insane fine, so you get no money and end up staying later than you would have anyway arguing with the parents.

Except that you do ultimately get the $1000, because you have a valid contract specifying that, and the premise is that some people are willing to pay it. Which is great -- you get paid $1000/hour to stay an extra hour. Well worth it. (And if not, specify the amount that makes it worth it.)

> How about instead of a fine you give the kids to CPS. You go home on time, the late parents never come back, or if they do they're never late again, and you win.

At which point you still receive no money but have to spend time arguing with them anyway when they show up at your house with an army of lawyers (or a machete) because you left their kids with CPS. And then you lose all your business because no one will trust their kids to someone who would leave them with CPS.

> I guess the point is that monetary punishments don't seem to work when companies can consider it as 'cost of doing business.' If we start taking away the company's hypothetical metaphorical children when they're late to pick them up then they have a reason to listen.

But we don't need them to listen as long as they're paying. Just take their money. It's worth more than their compliance, by definition, because the amount is explicitly chosen that way.


Fine is not supposed to be a price, taxes serve that purpose.


A fine is supposed to be a price. If the only purpose was deterrence then why isn't every offense a capital one and every fine in the amount of "everything you've got"?

Taxes are something else entirely. Income taxes aren't intended to put a price on working so that people won't do it unless it's worth the cost, they're intended to raise government revenue.


A fine is supposed to be a deterrent so it needs to be high enough to deter.


It's supposed to be a price.

Suppose there are fines for both texting while driving and blocking traffic. Now someone is driving in a place where they can't stop without blocking traffic, when they think of a piece of information that they need someone else to know as an urgent matter of life and death.

If they don't send the information right away their kid is going to die. No fine is going to deter them from that. To account for the probability of getting caught, the deterrence-level penalty would have to be something like death for you and your whole family.

I assume nobody is going suggest that the penalty for blocking traffic should be that the government will snuff out your bloodline. Because that's disproportionate, because the fine is supposed to be a price -- and in that case it's one worth paying, because the alternative is worse, so that's what we should want to happen. It's not a problem that we failed to deter someone from blocking traffic for a minute in order to save their child. "Fixing" things so that we actually deter them from that (and then their child dies) is not an improvement.

And the same is true for less drastic events that are still worth more than the cost of blocking traffic for a minute. Which is why a fine is a price, proportional to the harm.


>At which point you can be happy that the rich person is voluntarily paying the 3 cent fine instead of the 1 cent parking fee.

No, because the issue here is not like a fee, it's about breaking the law and how you should be punished for it in order for it to deter you. A more apt comparison would be "you can be happy that the a rich person is voluntarily paying 500$ to park on top of a crosswalk. In this case you want to deter the person from doing something that harms others, not just to make them pay for it, which in this case means either a fine indexed to income or jail time, so it hurts you even if you are a billionaire.


Nope, deterrence is still only required proportionally. If someone parks on a crosswalk and the cost of that to society is $200 and the fine is $500 then the fact that they're paying $500 means you're still coming out ahead. And if the cost to society is more than $500 then you've set the fine wrong regardless of who is paying it.


But the point isn't to turn something bad into a valid transaction that is simply unfavourable. The point is to deter the behaviour in the first place, regardless of how much you're willing to pay to do it.


But why would you want to do that? Why would you prefer no-transaction over one that generates a $300 profit?


Nope, deterrence is still only required proportionally

Cite?


There is an argument for indexing fines to income or net worth for people too (in addition to severity of the crime) -- if you want to stop a behavior, for example speeding, it doesn't make sense to set the fine equal for everybody unless wealth distribution in society is remarkably flat, so the marginal value of lost money is similar for everybody. If you don't index for ability to pay you just create a separate set of laws for different classes of people.

This is basically the same argument as for progressive taxation.


> There is an argument for indexing fines to income or net worth for people too (in addition to severity of the crime) -- if you want to stop a behavior, for example speeding, it doesn't make sense to set the fine equal for everybody unless wealth distribution in society is remarkably flat, so the marginal value of lost money is similar for everybody. If you don't index for ability to pay you just create a separate set of laws for different classes of people.

The issue is that stopping the behavior is committing to a bad abstraction.

Cars can kill people even below the speed limit. If you drive faster, the probability goes up. That is an externality, because you put others in danger in addition to yourself, regardless of which speed it is. In principle what you ought to do is price the externality. You create some amount of risk by driving a mile at 50MPH, so you're charged a proportional amount for that. The risk created by driving at 70MPH is more, so the charge should be higher, proportional to the higher risk.

But that would require monitoring the speed that every car drives every mile and billing for it. Until recently that wasn't even plausible and even now it would be a huge privacy invasion. So instead we settle on choosing some speed, ignoring the cost of anyone driving slower than that even if its true cost is non-zero, and whacking anyone who drives faster with a disproportionate fine to compensate for most instances going undetected.

Committing to deterring all speeding at any cost is completely ignoring why we're doing this to begin with. We don't need to eliminate all risk -- that would imply eliminating all cars and other vehicles and in practice isn't possible even then.

What we need is to throttle the risk so that it remains at a manageable level. Which is exactly what pricing it does. That's true whether you're doing meticulous risk accounting or using blunt stochastic methods like speeding fines.

And when you price something, rich people buy more of it because they have more money. If the price you've assigned to the risk is actually proportional to the cost being imposed by taking it, you really don't need to stop them. Just let them pay for the risk in money. Then use the money to pay for safety improvements or compensate victims or whatever you like -- if the amount they're paying is properly proportional to the risk then you come out better off this way than by actually deterring them.

> This is basically the same argument as for progressive taxation.

The argument for progressive taxation is that we're not trying to discourage behavior and the rich are better able to pay, so charging them more will have less detrimental effect because it will have a lower impact on their consumption. It's more about taxing the poor less than taxing the rich more.


"when you price something, rich people buy more of it because they have more money. If the price you've assigned to the risk is actually proportional to the cost being imposed by taking it, you really don't need to stop them. Just let them pay for the risk in money. Then use the money to pay for safety improvements or compensate victims or whatever you like..."

So don't try to stop rich people from driving drunk and killing people, for instance? Just let them do it and then pay off the victims and the victims' families?

Is that really what you're suggesting?

Somehow I suspect you'd reconsider if someone you cared about was killed in a DUI accident. No amount of money can bring them back.


You're just committing to the bad abstraction again. Driving drunk is worse than speeding by exactly the amount that it increases the probability that you hurt someone. Which in that case is a lot, and so the fine should be proportionally a lot higher.

"You can't bring them back" isn't any less true for someone who kills someone driving 65MPH in a 55MPH zone -- or 55MPH in a 55MPH zone. The only difference is the probability, which is a difference in quantity rather than kind.

> No amount of money can bring them back.

Neither can it bring back the person hit by a bus because the government didn't have that money to spend fixing a bad intersection. Should we really let two families lose loved ones to that intersection when they could be saved with the money that not deterring a risk taker generates, even if that risk ultimately kills one person? What about the family who lost someone but the compensation allowed the survivors to live somewhere safer or afford better medical treatment and that saved someone else?

What you really want to be arguing is that we should never be trading money for lives. Everyone viscerally feels kind of that way. But that doesn't work. There is always a marginal safety improvement that would save additional lives in exchange for additional money. Any time you choose a smaller number of lives over a larger amount of money, what you're really doing is choosing a smaller number of lives over a larger number of lives.


What happens to your scenario if the fine is for murder, not theft? What happens if the excess speeding results in measurable excess deaths? Let's keep it real.




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