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Comment by m-p-3 | Hacker News Reader

I wish fiscal fraud was more hardhly punished. In a democratic nation, it's basically stealing money from all of us, and not putting a share of resources that supports programs that benefit citizens of all income levels.

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It's also anti-competitive behaviour which in the end makes the fine an acceptable cost for the virtual monopoly.

How is it anti-competitive?

Two companies(nvidea, AMT) make similar products and hold a roughly 50:50 market share. both are doing well, both are selling units.

nvidea grows greedy and hires shady accountants to commit tax fraud, enabling nvidea to keep more after-tax money.

next year, nvidea has more money to dump into R&D -- they build a better product, and charge more for it. market responds, nvidea grows richer, ATM suffers losses.

nvidea keeps stealing money. has more for R&D, and more for marketing. nvidea buying sponsored reviews. keep building reliable products. more money for support staff.

ATM operating with a smaller budget every year. still improving, but not growing.

nvidea has even more money for R&D. more money for aggressive marketing. more money for sponsoring studios. "our art was built with nvidea products, and is best enjoyed using nvidea products".

the practice of stealing money to further growth to eclipse the competition by any means is hella old.

Evading tax let them be more profitable (or more affordable) than companies that can't do it.

I don't know, that just sounds like regular "competitive" not "anti-competitive".

By the same logic, does developing a more efficient manufacturing process (eg assembly line) count as "anti-competitive"?

If breaking the law leads to an advantage over other companies, that strikes me as anti competitive. They are not competing on the merits, pricing, or service of their products. To take it to an extreme, hiring an assassin to literally kill the competition is anti competitive.

Which law did Google break? It sounds like they followed the law and that’s precisely the problem.

They disguised the extent to which their activities in France played into their operation for the purpose of putting it all on the books in another country. They were doing work in France and did not declare it as required by law.

If they didn't break the law they wouldn't have agreed to a $1B settlement.

Did Google admit wrongdoing?

Edit: I thought it was common knowledge innocent parties settle lawsuits routinely. Is that not the case in Europe?

And I thought it was common knowledge that corporations "settle without admitting wrong doing" when they're guilty as shit but know they'll have even larger punitive damages if they drag out a trial.

But then again, maybe you're right and Google would have paid their lawyers more than $1B fighting this, so it was cheaper for them to settle.

I think one of us might be pretty naive...

I also thought it was common knowledge big companies tax evade routinely.

Committing fiscal fraud is breaking the law.

It's anti-competitive because it makes you competitive through illegal actions. Whoever sticks to legal actions can't compete. Hence anti-competitive.

The point of market competition is that you can't do some certain things to make sure your output is productive.

You can go and kill your competition and that would also be competitive - but we don't really want that kind of behaviour so we have rules against this. When you're breaking and undermining those rules you are being anti-competitive - you are subverting market competition.

Umm, tax fraud by $BIGCORP amounts to robbing people who are forced to pay their taxes through the payroll. How is daylight robbery the same as legitimate competition?

Anti-competitive means anti-"fair competition"

Not OP but I guess it’s because a monopoly can afford to keep on paying fines and continue the same practice. A smaller competitor pays by the rules, can’t afford to pay fines, hence anti-competitive.

If you pay your tax and not your competitor it is self explanatory.

m-p-3, i am so glad you verbalized this, it is crazy how only few people understand this. Instead tax evasion beeing a shame infront of society, majority regards it as a virtue.

I think there is a fine line a lot of major companies have to go through to ensure they are not inadvertently doing fiscal fraud (and other types of fraud) while maximizing their main goal, which tends to be profit maximization. If the government punishes too hardly, individuals and corporations are more likely to shy away from that market due to increase in operations cost (E.g. More lawyers + accountants) and implicit risks. Customers would also move away from those products and services if the cost became too high.

Part of the governments job is to ensure that they react to potential loopholes faster, decreasing the competitive advantage that a non-conforming organization may have. A harsher punishment may even put some companies out of business, impacting unemployment rates, supply chains, medium-long term government revenue and the services they provide.

How would you go about increasing the punishment while considering the possibility that the corporation inadvertently did that? Would you punish larger companies more harshly? How would that impact the market place?

Corporations do everything inadvertently. They're not sentient, they're a pile of emergent behaviors driven by incentives.

You increase the punishment because they inadvertently did it. Then maybe you'll get an incentive structure that prevents it next time.

I couldn't agree more. This is something that no one, from any polical side, right or left or republican or democrat or whoever in whatever country, says enough. Companies are indeed considered as real entities whereas they are just emergent structures which behavior comes from decisions made by real humans. And I truly believe that those real humans should be trialed and sentenced more or at least as much as the company they are working for in cases of fiscal fraud. And this is not the case now, the company shielding them from the consequences of their individual actions. For companies, the justice system works quite well (just like here, even with extraterritoriality and fiscal paradise), nations can manage to apply the law to them. But the responsibility of the individuals in the same legal cases is often forgotten. Take the Google example : even if you talk of "fiscal optimization" to give a nice appearance to those actions, some individuals in Google crossed the line and knew it perfectly. And it is true that Google, as a structure, is ok with it ('don't do evil' does not apply when it comes to maximizing profits). But those people at Google who crossed the line will never appear in court, nor the ones having validated their work (probably the higher management), which is a shame in my opinion. It happens that a company break the law, but it never does it alone : it is people who instruct it to do so. To see my point, look at England at the moment : if a ruler of a country decides to break the law, is it the country that is responsible or the leader ? My view is that it is both and both should be prosecuted by the individuals impacted.

Companies aren't different from people. Everyone responds to incentives.

they're a pile of emergent behaviors driven by incentives

Never thought about it that way, thanks for the insight!

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