Tech Giants Could Face Massive Fines
A proposed law would dramatically increase maximum fines that can be imposed on companies that break monopoly rules. Tech firms would be among the most likely to be affected in the admittedly unlikely event the law was enacted.
The proposed bill would be known as the Monopolization Deterrence Act of 2019. It's designed to change the current system by which the maximum penalty for violating the main US antitrust law, the Sherman Act, is $10 million.
That applies regardless of the size of the company or companies involved. Critics say such penalties are little deterrent to major companies, including tech firms. For example, several leading tech companies have annual worldwide revenues of more than $100 billion - ten thousand times more than the $10 million figure.
The bill would instead set down a new maximum penalty based on revenue. The new limit would be the highest of two figures: 15 percent of the company's US revenue in the previous calendar month, or 30 percent of its US revenue during the period it was found to have breached the Sherman Act. (Source: congress.gov)
Similar System In Effect In Europe
The move is reminiscent of the system in the European Union (EU) where competition violations also carry maximum penalties based on revenue. Some penalties imposed in recent years include:
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Google's $5 billion fine for unfairly requiring Android makers to install Google Search and Chrome if they wanted phones to be able to access the Google Play store.
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Google's $2.7 billion fine for unfairly promoting its own Shopping service in search rankings.
- Microsoft's $1 billion fine (reduced from €899 originally to €860 million) for unfairly bundling Windows Media Player with Windows.
In each case, the penalty was so high because it took into account the company's revenue.
Bill Unlikely To Succeed
As Arstechnica notes, the US Department of Justice is currently investigating alleged antitrust violations in "search, social media, and some retail services online" while the Federal Trade Commission (FTC) is investigating alleged antitrust breaches by Facebook. In neither case has any wrongdoing been proven at this stage. (Source: arstechnica.com)
It's highly unlikely the proposals will become law in the US however. The bill was introduced and sponsored entirely by Democrat senators and doesn't appear to have bipartisan support.
What's Your Opinion?
Do you support the proposals? Can fines ever be enough to deter anticompetitive behavior by tech giants? What type of behavior by big tech companies goes too far when it comes to taking advantage of their market position?
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Comments
Facebook, Cambridge Analytica $5 billion fine
I'm looking forward to the $5 billion fine that Facebook is reportedly going to have to pay for the Cambridge Analytica scandal. I recently watched the Netflix documentary "The Great Hack (2019)," which details the scandal in-depth, and was shocked to see a wire-tap of top executives boasting how they abused Facebook's systems to sabotage the 2016 US presidential election. The last statement is open for debate, but if you watch the film you'll know exactly what I'm referring to. This type of behavior (privacy / antitrust / abuse) needs to be punished severely, with tech companies held fully accountable.
Who gets the money and do they really pay it?
Facebook is being sued by a conservative outlet. The Great Hack seems to contradict everything that I have witnessed. I guess the traditional media influence lost to the social media. Everything was anti Trump from major news outlets. Trump was always losing in the polls. Yet it seems the Trump stole the election will never end despite the D nominee was given to the wrong person.
A Congressman recently posted a list of Trump donors and where they work on Twitter. Since he is a politician nothing will happen. Who should I fear more a private industry or those in government with opposing views. How did he get this information?
That's the $xxx million
That's the $xxx million question. And no one that can get results ever runs it to ground.
I can understand a Government not wanting a corporation to get so big it could take over the Government itself. I don't think anyone can explain how that would work, a Corporation being the government. Other than it wouldn't work.
At one time corporations had
At one time corporations had their own militarizes. I guess that's why our founders didn't like them.
I bet they don't pay those fines. As Dennis said before, where does the money go.
Those companies got big because they made things people like. I can't really say that about governments.
Re: How did he get this information?
How did he get the donation information to publish? Public Records. All individual donations to politicians are public records. Only donations to PAC's are anonymous. An individual republishing public records may be a little slimy, but it is also 100% legal.
Thanks for the info. Does
Thanks for the info. Does that include their place of employment? Just another reason not put money in campaigns.
% of Revenue is the way to go
When fines for wrongdoing are seen as a normal part of business, cheaper than complying with laws and regulations, the fines need to be much bigger. A $10M fine to a big tech firm is about as significant as a $10 fine is to me; pay it and continue on, business as usual. Up that by a factor of 1,000 and you will get their attention, and maybe even change their behaviour.