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Comment by judge2020 | Hacker News Reader

judge2020

Not sure why this is downvoted. publicly traded companies are legally required to go for maximum profit for their shareholders. Without some Announcement like “we’re going to be making privacy friendly TVs, but customers will be paying more to make up for the lost ad revenue”, it would be pretty bad mismanagement for a company to not show ads somewhere in their consumer TVs when every one of their competitors is doing just that.

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It's downvoted because it's false:

To quote the U.S. Supreme Court opinion in the recent Hobby Lobby case: “Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.”

https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...

> Not sure why this is downvoted. publicly traded companies are legally required to go for maximum profit for their shareholders.

This stupid meme needs to die. The management of companies has a fiduciary duty to act in the best interests of shareholders. That does not imply any legal requirement to maximize profit.

Perhaps it is exaggerated but ‘no ads’ means higher prices (due to lower revenue on the backend), and thus lower sales since people only really purchase TVs based on the shelf price. If the higher price doesn’t make up for lost overall sales revenue, that means lower actual revenue. There’s also the (maybe fictional) concept of selling the most TVs leading to more ad viewers, thus increasing the value your ad platform can provide compared to your competition.

“We acted in the best interests of our shareholders by not fucking our customers over and tanking our reputation.”

Companies can easily argue the point on stuff like this. Raw profit isn’t the only thing you can do for shareholder value.

Reputation only matters if it leads to a loss of sales. I’m sure ads don’t have enough impact to drastically lose more money than the ads otherwise make.

As long as they can make a reasonable argument, they’re good.

A legal requirement to maximize profits would be insane. Amazon couldn’t have spent a decade forgoing profits to build up R&D. Chipotle wouLd have to use cheaper chicken. Companies couldn’t donate to causes. It simply doesn’t work that way. (As someone else has pointed out elsewhere on this thread, the Supreme Court agrees.)

It's not exaggerated it's fake. You are obligated not to screw the shareholders not to service any fantasy that could hypothetically enrich them irrespective of long term effects.

No they really aren’t, this is a common but silly misconception. Managers have a fiduciary duty to their shareholders but there’s a huge amount of latitude in what that means with the only real bright line rules being things like “don’t improperly enrich yourself with company assets”.

If managers want to sell tvs without ads, they absolutely can. If the board (which represents the shareholders) disagrees with that decision, they can fire the managers, but there’s no “law” requiring them to chase profits. That really lets normal greedy bullshit off the hook too easily - laws don’t cause anti consumer behavior, garden variety assholes do because it makes them more money.

It’s downvoted because it’s wrong; It’s a myth. There is no “legal fiduciary duty” to maximize profits. There is a fiduciary duty to the shareholders, but only in the sense of not wanting to be voted off the board and possibly sued if you mislead them. If the whole board agrees on your plan to bank the company on a possible suicide move, you’re fine.

right so the dollar store is obligated to charge $100 for everything because of your 'legally required' meme? That's not the way things work. You can sell things for less profit margin and companies do all the time.

I mean if they must show ads to make money, legally, maybe they need to actually force you to swipe a credit card every time you want to watch? That's more money, they're legally obligated.

Maybe instead of a video stream, you turn on the TV and it just steals your identity and steals your wallet - that's profit, right?

Just because everyone else jumps off a bridge does not make you legally obligated to do the same.

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