That’s the issue - 1 billion sounds like a big enough number. Most people hear it and think “Hah! Just desserts!” but it’s not. They make so much money that even 1 billion is something they can easily ignore. The average person has such a poor grasp on just how much money is being accumulated that its easy to fool them into thinking a fine is far more damaging to the company than it is.
For a company whose business model is based on breaking the rules, fighting tooth and nail to gain influence, and eventually just paying the fines, I’d image they forecast this and decided the risk/reward was worth it. It’s just 2% of annual revenue.
“This time around, the AP said that the 824.9 million euro fine was calculated as the maximum penalty that’s derived from four percent of a company’s worldwide annual turnover.”
Annual turnover is revenue, so top line money, before taxes, expenses, etc. They profited a little over $10 billion last year, so a nearly $1 billion fine is a little less than 10% of their profit.
I wouldn’t call it insignificant - as a percentage of profit, it’s not bad. But when we’re talking about billions, it’s still probably not enough to get them to stop.
I’d say $1 billion is not inconsequential.
That’s the issue - 1 billion sounds like a big enough number. Most people hear it and think “Hah! Just desserts!” but it’s not. They make so much money that even 1 billion is something they can easily ignore. The average person has such a poor grasp on just how much money is being accumulated that its easy to fool them into thinking a fine is far more damaging to the company than it is.
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For a company whose business model is based on breaking the rules, fighting tooth and nail to gain influence, and eventually just paying the fines, I’d image they forecast this and decided the risk/reward was worth it. It’s just 2% of annual revenue.
From the article:
“This time around, the AP said that the 824.9 million euro fine was calculated as the maximum penalty that’s derived from four percent of a company’s worldwide annual turnover.”
Annual turnover is revenue, so top line money, before taxes, expenses, etc. They profited a little over $10 billion last year, so a nearly $1 billion fine is a little less than 10% of their profit.
I wouldn’t call it insignificant - as a percentage of profit, it’s not bad. But when we’re talking about billions, it’s still probably not enough to get them to stop.
As long as it’s profit, not revenue, even 50% is little.
Once it’s revenue and they’re in the red will the fine be more than a regular business expense.
9% of annual profit. Inconsequential.