Proposed Bill Would Make Monopolies Pay 'Serious' Fines (arstechnica.com) 98
An anonymous reader quotes a report from Ars Technica: The Federal Trade Commission's recent $5 billion settlement with Facebook largely drew two responses. One holds that $5 billion is objectively a large sum of money, while the other holds that, against Facebook's $55 billion 2018 revenue, the penalty amounts to mere drops in the ocean that will go completely unnoticed within the mammoth company. Both takes are true: a fine can be both a very large amount of money and yet also not "enough." The FTC's ability to penalize businesses, though, is limited under existing law. And so a group of Democratic senators has introduced a bill that could change the law in order to let the FTC fine a bad actor big bucks.
The proposed law basically seeks to deter anticompetitive and monopolistic behavior by charging great gobs of money against the companies that get caught doing it. Businesses found to be in violation of certain antitrust laws would owe the greater of either 15% of their annual U.S. revenue or 30% of all revenue over the period of time the unlawful behavior took place. Senators Amy Klobuchar (D-Minn.) and Richard Blumenthal (D-Conn.) introduced the bill, which was also cosponsored by senators Dianne Feinstein (D-Calif.) and Ed Markey (D-Mass.).
The proposed law basically seeks to deter anticompetitive and monopolistic behavior by charging great gobs of money against the companies that get caught doing it. Businesses found to be in violation of certain antitrust laws would owe the greater of either 15% of their annual U.S. revenue or 30% of all revenue over the period of time the unlawful behavior took place. Senators Amy Klobuchar (D-Minn.) and Richard Blumenthal (D-Conn.) introduced the bill, which was also cosponsored by senators Dianne Feinstein (D-Calif.) and Ed Markey (D-Mass.).
$5 billion? (Score:1, Insightful)
$5 billion in cash out of $55 billion in revenue is quite noticeable. Their net income is probably around $20B, so that is 25% of their net.
Re:$5 billion? (Score:4, Informative)
Except this is supposed to be a response to what they have been doing since 2011. If you divide that 25% by 8 it's not a scary number anymore. The proposed bill would make sure that it stays a scary number even for big companies, like those that would be targeted by a monopoly probe.
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"New business model guys! We need to make at least 50% profit so we can continue to pay the government to look the other way. Anybody got any ideas, or should we just keep fleecing the public?"
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I'm pretty sure that has been the business model of lots of companies since the beginning of time. We call it "lobbying" and "thinktank studies" now.
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Being deluded enough to run for President, maybe they want to sponsor stuff that has some remote prayer of passing in the Senate and becoming law.
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Because they are running for high office, haven't been ruled out of being nominated yet, and don't want to pre-emptively shut down the train of Brinks trucks dumping wheelbarrows of cash into soft-money ads on their behalf during the general election?
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Every company's "net" is a bullshit number they can raise or lower at will. Gross is the only thing that actually matters.
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For example, instead of paying $5 billion in case, you would instead keep the cash, take a 99 year loan where you only pay interest, then create a shell company of some type that will take ownership of the loan. Then use some sort of government subsidy to finance the new company and pay off the original loan using subsidies and then bankrupt the shell company.
I would imagine that there's absolutely no reason to pay
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This proposal is SPOT ON, hit them where it hurts, it's the only punishment they understand.
Sure! (Score:4, Insightful)
Not a bad start but... (Score:4, Insightful)
Re:Not a bad start but... (Score:5, Insightful)
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Insightful. That must be why the legislation is a percentage of revenue and not profit.
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Forget the fines alone as that'll never be enough. Put the entire senior staff in jail. Let them be someone's bitch for the next 10-20 years. That ought'ta straighten them out...
So to speak...
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Why not instead run a study that estimates the excess profit generated by the illegal monopolistic behavior during the period in question, and the resulting fine is at least double that?
The canonical multiplier in US law, when the lawmakers wanted to make a point and/or make up for the ones that got away with it, is three ("Treble Damages"). This appears in a lot of laws, including antitrust law.
So you may already have what you're asking for. (IANAL and haven't checked if the place(s) it appears in antitr
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Bullshit (Score:3, Insightful)
this is stupid. there is only one solution to monopolies. breakups.
otherwise fines are nothing more than rent seeking. fines benefit the state. the victims rarely sees any benefit other than seeing a business get fined.
So stop this bullshit, the only thing happening here is the Government enriching itself off of your misery. go ahead... cheer for it like a moron!
Re: Bullshit (Score:1)
Break them up so they can merge and recombine over the next two or three decades?
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The price of peace is digging up Teddy Roosevelt every few decades, placing a good strong stick in his zombified hand, and letting him go to town.
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The U.S. Government rarely considers breaking up monopolies or cartels. More often, it's very enthusiastic about supporting and enforcing cartels and monopolies. You might consider the sugar industry (high tariffs), milk industry (guaranteed minimum prices), the AMA's deliberate limiting of the number of doctors, the horrific cable and internet services, the corn industry (price supports)...
Wrong monopolies (Score:5, Insightful)
Honestly, why does anyone care that Facebook has a monopoly on, what, Facebook updates? Meanwhile Monsanto has a death grip on seeds for our food.
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Without meaningful competition, they can set ad prices as high as they want. This increases the costs to advertisers, who in turn pass it on to you through higher prices. So in the end you pay for it whether you use Facebook (or one of its numerous former competitors they now own) or not.
You can argue that advertising is evil, and I wouldn't disagree, but the reality is that companies need a way to reach their potent
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> Without meaningful competition, they can set ad prices as high as they want.
Because you can only put ads on Facebook ... right ? This whole monopoly-rant is getting more and more stupid. You should think about more dangerous monopolies... like printing money.
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You... WATCH advertising?
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Imagine if they merged. "Seymour, feed me fake news!"
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Anyone they censor. (Score:2)
Honestly, why does anyone care that Facebook has a monopoly on, what, Facebook updates?
Anyone who wants to use a Facebook-like social medium to say something Facebook censors could give you a reason.
This bill has a snowballs chance... (Score:2)
Come on, we all know this bill will have a snowball's chance in (H. E. Double Hockey Sticks) of becoming law.
This is nothing more than election cycle political posturing to manipulate the voter and hopefully get some PR traction to use when bashing your opponent. Half of the bill's noted supporters are up for election in 2020. The political campaign circus is getting into full swing early.
I can't wait to see what happens (Score:3)
to Oracle, Microsoft, AT&T, Comcast, Disney, Wal-Mart, Bank of America, HSBC...
Oh yeah, they're too big to fail, or be charged with anti-trust.
By too big to fail, I of course mean, too busy paying millions to "re-election campaigns" not bribes, to many congress critters.
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The reason Google+ was closed down (Score:2)
Okay. (Score:2)
Why bother writing news about it when it definitely won't actually happen?
Nah (Score:5, Insightful)
Nah. How about seize all revenue while they were operating illegally, then inflict mandatory prison sentences for all CxOs and the top 10 stock (and option) holders, following as many shell corporation layers of separation until at least 80% of all funds are accounted for directly to people.
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This wont really work: a) Execs can still run the company from prison. b) Prison sentence will likely only be 90 days or something stupid like that. c) how do you know when you've hit 80% unless you trace down ALL the money? d) This doesn't account for all the money siphoned off into personal accounts in the Cayman Islands. e) The burden to the legal system would consume nearly all the money you seized, nullifying any kind of possible reparations.
Doesn't it just seem easier to have a death penalty for cor
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We can try the same sort of thing for a mass shooting as well - life sentences for everyone living in the same town as the perp! That'll make things way better, right?
No, putting people in jail for a crime they didn't commit, nor hadve any control over isn't a good idea. Unless you're trying to make us more like China, I guess....
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It's funny because often the same people who abhor how prison is often used as punishment rather than rehabilitation like it should be are the first to scream from the rooftops for the guillotine on corporate malfeasance. The simple truth is that corporations are full of people, and that excessive corporate punishment disproportionately affects everyone involved in the company and ends up punishing the many for the sins of the few - all the way down to the worker bees and all the middle class folks with an
Motivation? (Score:2)
Republicans appear to have only started "caring" about monopolies when they came to believe they are being politically hurt by near-monopolies themselves, such as perceived content bias against their political views. Before, they often considered antitrust movements as excess regulation of private industry.
Look how they pressed to remove the FCC "fairness doctrine" that required broadcasters to give equal time to both sides of a political point of view.
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Republicans appear to have only started "caring" about monopolies when they came to believe they are being politically hurt by near-monopolies themselves, such as perceived content bias against their political views.
So, seize the day? Given recent republican hatred of Facebook, perhaps this Democrat-sponsored bill has a chance.
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So, seize the day? Given recent republican hatred of Facebook, perhaps this Democrat-sponsored bill has a chance.
So, When the left misunderstands the concept of a monopoly and the right just wants to punish a company they hate, they’ll both take action.
Puts a whole lot of truth in the saying “Bipartisan: When the party of evil and the party of stupid work together to do something both evil and stupid.”
The litmus test for whether the government should step in and fuck with capitalism should be reserved for only when capitalism has failed miserably and, it is prohibitively expensive and/or exceedingly
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It has to be a really big problem before intervention is taken? Why ignore medium problems? As a voter, I have the opinion that monopolies and near monopolies stifle innovation and choice.
This comes after personally observing and being victimized by Microsoft and big telecom/cable for decades. Why am I stuck with stupid pr
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What you're missing is that your lack of choice in telecom/cable is because of previous rounds of government regulations to "solve" perceived problems. The reason to avoid heaping on regulations is that the vast majority of the time, they end up with enough regulatory capture and "unintended" consequences that they make things worse over the long run, not better.
Government officials aren't wiser, nor less self-interested than private individuals. They don't get issued a halo when elected or appointed. Allow
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Telecoms face the "last mile" problem. If last-mile connections were to a switchboard shack, then one would have more content choice at least because they can switch content providers even if the last-mile wires are treated like a utility.
It's not economical nor ecological for every competing company to lay duplicate wires to each potential customer (house), thus there will have to be some central control of wiring.
But that's not the issue with Microsoft.
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The U.S. for a long time has had government monopolies granted via regulation over last mile provisioning. In the days of phone lines, then DSL, only one telcom company was allowed to run connectivity. For cable TV, which eventually turned into cable Internet, almost everywhere in the U.S. again had government agreements which specified just a single provider allowed.
If it's not economical to allow competition in last mile connections, then there would be no need for any regulations prohibiting it, because
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Why ignore medium problems?
MySpace, Blackberry, Blockbuster Video - for a time, those companies had "near monopolies" on their respective markets. Medium problems should be ignored because capitalism seems to have an uncanny knack for eventually sorting these things out on its own. Would you really rather have the winners and losers picked by the government?
This comes after personally observing and being victimized by Microsoft and big telecom/cable for decades.
We're talking about Facebook, not telcos providing an essential service or a software company using anti-competitive licensing agreements to muscle out the competition. Anyone
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The Fairness Doctrine [wikipedia.org] never "required broadcasters to give equal time to both sides of a political point of view".
You may be thinking of the Equal Time Rule [wikipedia.org], which is specifically about political candidates and is still in effect.
Your rant about Republicans is equally ignorant. The free market/libertarian branch of the GOP "cares" about monopolies, the government created ones, and always has. What they don't care about are the non-monopolies which the left-wing has complained about in the past, the ones wit
The $5 billion fine was for privacy violations (Score:5, Informative)
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Fines are already pretty high for monopolies (Score:2)
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Won't help in America (Score:2)
The USA sets a strange bar for abuse of monopoly power in that a direct and provable outcome for a customer needs to be demonstrated. This is why the anti-trust laws in the USA are at odds with the rest of the world where businesses can be deemed to abuse their power if they negatively affect other businesses, to say nothing of the consumer.
i.e. The thing Google got in trouble for (locking Microsoft out of the search market on Android) in the EU would not actually be investigated in the USA since it didn't
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Strange? How about, the only thing which remotely justifies fines is behavior which resulted in demonstrable harm. Without that, you're just fining whichever company the politicians and bureaucrats in power don't happen to like that week.
Negatively effecting other businesses is how a business positively effects consumers. It's called competition, and we as customers win when businesses compete on service/product/price, rather than when they compete to please some regulatory board instead in an effort to dis
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Strange? How about, the only thing which remotely justifies fines is behavior which resulted in demonstrable harm.
That would be a good step, except that's not what is happening. Demonstrable harm in the USA needs to directly financially affect a consumer from the monopoly. There's a world of indirect harm such as the reduction of competition that goes unchecked.
That is indeed strange.
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Start with Amazon. [bloomberg.com]
Isn't that just always 30% (Score:2)
Law of unintended consequences (Score:3)
Although we're all very happy that a company would pay its fair share, first of all, companies already divert their 'revenue' across the world and the US courts would have no jurisdiction to demand accurate revenue of foreign subsidiaries.
Second, we then get into a situation like the EU where any downturn in the government revenue cycle gets made up by trumped up charges for anything the government doesn't like - see Google, Microsoft, Apple and Facebook fines in the EU for pretty much the crime of being successful in their markets.
It's the "I hate that business and want it fined" (Score:3)
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New Math? (Score:2)
Since when is 15% of US revenue ever going to be greater than 30% of all revenue? Considering that all revenue *includes* the US revenue, and 30% is greater than 15% it stands to reason that 15% of US revenue can never be greater.
regrets, too few to mention (Score:2)
The military has a saying: we can't make you obey, but we can make you wish you had. Too bad the military enforces a monopoly on same. The FTC could sure use a dollop of can-do marine mojo.
Forget for a moment whether this is the man purchasing an inflatable woman at the back of a shabby magazine rack, and consider the implications for corporate America.