Some weeks ago, I saw a comment on HN[0] that made me think. It presented an argument for current level of fines for all kinds of white-collar mischief being sufficient. The reasoning as I remember it was along the lines of:
- The fines are usually attached to an order to stop the activity in question. This leads to the misbehavior being corrected, because a company continuing their practice against the order will be committing much serious offense.
- Such "slap in the wrist" fine clearly establishes a particular practice to be illegal, which influences decision making process in other companies. When considering whether to walk a legal tightrope, there's a world of difference between theoretical liability and a clear example of someone else landing in hot water for doing that same thing.
Put like that, it sounds reasonable to me if fines start at a low level (regardless of the public's opinion of the offender).
I'm posting it here not because I agree[1], but in hopes that someone can point to evidence for or against this approach working. Do companies continue to do the things they were fined for in the jurisdictions they were fined for? Are other companies opting to engage in a behavior after someone else in the same jurisdiction was fined for it?
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[0] - Can't find it now :(.
[1] - I have no opinion just yet. I thought about it a little, and I realized that from game theory point of view, you'd expect a company threatened with the 2-4% annual revenue level fine to put up an expensive fight, not to protect the behavior in question, but to contest the fine itself. This adds another point in favor of this view.