Seagate hit with $300M penalty for selling sanctioned storage to Huawei | Hacker News Reader

Seagate hit with $300M penalty for selling sanctioned storage to Huawei

theregister.com

316 pointspinewurst267 comments

I used to work for Huawei's storage division. When the sanctions hit, the company could no longer buy hard disks from American and Japanese companies. And there weren't any Chinese manufacturers either. Flash storage however was easy to procure. So, the product roadmap was thrown away and we pivoted to All-Flash storage.

Seagate is officially Irish and does have factories there, maybe they hoped this was sufficient? In any case why not go for a Taiwanese manufacturer?

Regardless of where final assembly takes place, if the devices include any US components then they are likely subject to sanctions.

I wonder how much of the mainland static about Taiwan is really about seizing TSMC in particular. It represents too many global IP and fab eggs.

> wonder how much of the mainland static about Taiwan is really about seizing TSMC

Virtually none. (It’s not something that can easily be seized.)

I don't know if an adversary would prefer to grab the people of TSMC or the facility, but as a defender that has been thinking about this for a long time, I would imagine that TSMC have contingency plans to get the smart people out and dynamite the facility, no? Somewhat like the story of US soldiers mopping up rocket scientists working for Germany in 1945 and getting them stateside.

granted, there is this "us vs them" mentality, but prior to the whole Xi/nationalist thing, weren't a lot of chip engineers going back and forth, employment-wise, between TSMC, SMIC, and other mainland companies?

> prior to the whole Xi/nationalist thing, weren't a lot of chip engineers going back and forth, employment-wise, between TSMC, SMIC, and other mainland companies

Yes. A free-trade agreement was being negotiated [1]. And the fraction of Taiwanese who identify has both Taiwanese and Chinese has quartered since Xi came to power [2].

[1] https://www.reuters.com/article/taiwan-china/taiwan-china-ai...

[2] https://en.wikipedia.org/wiki/Opinion_polling_on_Taiwanese_i...

Is the Taiwanese government not going to evacuate TSMC's personnel outside of the country and launch some artillery on the facilities?

> Is the Taiwanese government not going to evacuate TSMC's personnel outside of the country

That makes defending Taiwan less desirable strategically speaking.

> and launch some artillery on the facilities?

You just need to contaminate the facilities with impure outside air and they're most likely ruined for months if not forever; no need to mobilize precious troops to do this.

I have heard that the TSMC fab is considered a strategic asset and has demolition charges that Taiwan gov can use if required, but that was just internet scuttlebutt and cannot be considered reliable. That said, I would be very surprised if the fab didn't attract a missile strike from western interests if it did look like China was going to be able overrun Taiwan and capture the fab intact.

I would much rather be sure the equipment is destroyed beyond repair (and that ASML cannot provide replacements or repairs) than risk a contaminated fab be put back into service. I'm sure the Chinese gov would be willing to throw a lot of resources at it if it was "only" contaminated and the chance of repair existed.

> risk a contaminated fab be put back into service

You actually most likely can't afford the risk of running a contaminated fab.

You just can't get economically viable yields under contamination; if you could, why would all those fabs care about keeping a very clean environment in the first place?

Sure, I get that. I meant that China has ~1.4 billion people and one of the largest economies in the world. If they really wanted to get a contaminated fab back into operational condition they could throw effectively unlimited manpower and resources into cleaning it up.

Thus it would be better to blow the place up and not have to worry about it.

Samsung is just 2 years behind TSMC, and is in much more neutral country. Even Intel which is in its worst shape in a while is 4 years behind TSMC and is catching up. I highly doubt loosing 2 years of progress is even a discussion point for the war between two countries.

War between China and Taiwan(with US as an ally) will set the world decades or even centuries behind even if nukes are not used. If nukes are used, it will set the world millenia behind.

Seagate, Western Digital/Hitachi and Toshiba are the only realistic options.

Is there any reason why HDD were sanctioned but not CPUs? Like why grant AMD and Intel exceptions? Did Huawei have some sort of super strategic use for them?

They had 1.65B net income in last year, and they have to pay 0.06B every year for five years, so it's around 4% of their net income. It's not business ending or severe but it isn't exactly cheap.

Also as the article notes, future years may not be as rosy and it will not be fun having a fixed cost hanging over their head.

Indeed, this one will sting for Seagate. That's like a $10B fine for Apple.

I don't know what point you are trying to make with that $10b fine for Apple comparison. We know the number and the % of their income. That's enough without meaningless comparisons.

> That's enough without meaningless comparisons.

The comparison is far from meaningless. If penalties have no sting, they have no deterrent value. Did you object the particular mega-company comp? If so, pleas feel free to insert your own.

$10B is a lot of money, no doubt, but it only represents about a fifth of what Apple currently has in cash. How much cash does Seagate have? Probably none. So it would be more like a $60B fine for Apple.

> How much cash does Seagate have? Probably none

You know all public companies disclose this quarterly right? You could just look it up instead of giving an incorrect answer. They have $766m on hand. This is less than half of what seagate has on hand.

> They have $766m on hand.

Seagate has $766M in cash.

> This is less than half of what seagate has on hand.

What!?

Subtracting debt, Apple now has $54B in cash.[1] Subtracting a debt of $6.03B Seagate has minus $5.264B.[2]

[1] https://www.macrumors.com/2023/02/02/apple-1q-2023-earnings/

[2] https://tradingeconomics.com/stx:us:debt

300M is less than half of 766M.

Thanks, I just didn't see it. But then by this measure, since Apple has $165B in cash pre-debt, one would have to fine Apple roughly $64B, or about five Gerald R. Ford-class aircraft carriers, for the metaphor to be apt, not $10B.

They gave you a chatGPT number: incorrect with confidence

More precisely the percentage was 3.6, which is not great, but not terrible. I've been told it's the equivalent of a few pay raises.

Indeed, and it's a fine line between "the cost of doing business" and ruining a large company over the decisions by a few people. Would probably have been better to go after the people at the top than fining the company..

American justice is about extracting money from a corporate entity not personal accountability.

As long as money flows freely, the show must go on

No, the concept of having corporations is 100% about this since their creation. If you look into the history of corporations it's kind of the point. Not more 'you and your family will be completely ruined and destroyed' but instead 'you can lose your business' sparked a revolutionary change in business the enabled the modern world and allowed people to undertake huge products that no sane person would take a risk on if they assumed responsibility for.

All of that is financial.

Criminal violations are not supposed to be protected by the corporate veil.

And if management committed crimes they are punished. I even spent multiple years in the feds with some of those guys.

> Criminal violations are not supposed to be protected by the corporate veil.

And they aren't, at least in the US. Just look at Martin Shkreli actually serving 5 years in prison for securities fraud and personally repaying ~$70mil.

P.S. none of this is related to the Daraprim controversy btw. Thought to mention because I have been seeing that misconception quite a bit online.

Correct! Now, only if we behaved like that was true.

Except people get arrested for sanction busting somewhat frequently..

It's possible that the fine was already factored in the sale price. According to that other comment, Huawei had really no other choice that to buy them from an American company.

Maybe this is an unpopular opinion, but 4% of annual income for a nonviolent, political-games type of violation seems quite high to me. Especially considering this was only one sale, and only one product, not their entire income that was involved in the violation.

The whole point of the fine is punishment. Seagate will have a stronger financial motive to comply with the law. If it's cheaper to risk getting caught and paying a small fine, there's much less incentive not to break the law.

There is no reason to go into the comments of every post that shows a price of the fee a company paid in order to express why you think a company that is fined should be crippled because of it, the point is to deter people not to lay nuclear landmines for companies to be destroyed over. 99% of these comments are just maliciously lashing out about 'corporations' and no consideration that chomping into 5% of net profits has an effect greater than some bonus packages of the management teams (less cigars to chomp!)

Shouldn't the same logic then apply to people? Yeah, figured as much.

If you can ruin a person's entire life over a "mistake", you can definitely do the same to a company, or even better, to the decision makers at that company. Doing anything else just encourages continued bad behavior. No speculation, we have decades of observational data showing that companies and executives will do pretty much anything for a buck, legal or not.

Yeah I think many here would be fine applying the same logic to people.

How about not doing either?

It comes down to self-interest and the balance of power, not morals or human rights or any form of idealism that acts as a soft control of the masses.

Corporations are a faceless entity with tremendous power, both to harm and to benefit.

The average individual lacking comparative capital or influence has no weapon with which to fight and no gift which which to bribe.

Government, the monopolist of violence, wields its power accordingly. Why would it extinguish a benefactor when it can simply crack the whip to keep them in line and remind them of whose hand is on the whip in the first place? Whereas, the larger set of powerless individuals are handled brutally, not because it’s best but simply because it’s expedient and without consequence to the power-holder.

A secondary benefit, intentionally achieved by the most insidious of governments, is that the extinguishment of minor troublemakers removes the seeds from which a population might grow to realize their own latent power via cooperative “trouble-making”.

Government, in a democracy, is supposed to represent the choices of the people. They serve us. If they're not serving you, you are voting wrong.

If you vote for corrupt imbeciles because their sound bites align with some of your narrow interests, don't expect them stop being corrupt imbeciles when they are in power.

> …supposed to…

You’re right. But “supposed to” is just an ideal.

> …They serve us.

Do they really? The evidence suggests otherwise. So we must ask, why do they not serve us?

Leading us to…

> If they're not serving you, you are voting wrong

Well sure, in a democracy, if the representatives don’t work towards the population’s interests, then the population must be “voting wrong”.[1] But that is just begging the question…

“Why are they voting wrong?”

And sure…“They are fooled.”

But, How?

“They are fools.”

But, Why?

[1] Ignoring the problem of asymmetric information. A population simply does not a have access to all the information needed to ensure they’ll be served properly. The representatives know far more about their own intentions than any set of voters ever could.

Proper education, a corner stone of democracy (sometimes forgotten? In particular in that context). Not the full story, but for sure a critical part of it.

You might be interested in:

Disciplined Minds by Jeff Schmidt: https://ia800103.us.archive.org/22/items/jeff_schmidt_discip...

The Crisis of Democracy: https://ia800305.us.archive.org/29/items/TheCrisisOfDemocrac...

Both address the issue of education in the context of democracy and the current economic order.

The first being a proper critique and the second being from the perspective of the elites and power-holders, particularly the Trilateral Commission, helmed by Rockefeller. And its concerns and conclusions can be interpreted as being antagonistic to the goals and interests of the populace. It’s the origin of the phrase “an excess of democracy”. An “excess” according to who? one should reasonably ask…

Edit:

I says to myself, why not submit these to HN and maybe get a little discussion going?

And so I did…

Disciplined Minds: https://news.ycombinator.com/item?id=35643885

Crisis of Democracy: https://news.ycombinator.com/item?id=35643916

Thank you for your comments and links in this thread, very interesting.

And thank you for the friendly and encouraging comment.

Great. Then I want them encouraging corporations. I don't want my power company limited to the risks that their CEO can absorb (so projects under what? 20% of the CEOs disposable wealth that the CEO will willing to risk on the total of all projects?). I want a power company that can risk creating large solar farms and absorb the lawsuits that the CEO on their own would not be willing to take on if they were bearer of so much responsibility just couldn't risk it. You are pushing for a world of all large projects being limited to those done by billionaires just like the world of peasants that existed prior to the creation of the concept of corporations. You are pushing a much worse and limited world for the little people where they can't pool their resources and do ANYTHING larger than any one individual can assume the ENTIRE risk of.

NOTE: you missed the qualifying word "illegal" in my proposal. You can continue to take all legal risks just the same as before, but all shielding disappears if/when you commit to doing illegal activities. Hold CEOs and boards directly accountable for illegal activity.

edit: went through the thread and realized I didn't make it explicit that the proposal is to go directly at executives and board only in cases of illegal activity. It was implied but not explicitly clear. Making this edit to clarify my intent.

I like the logic of that. Corporations were originally given limited liability in return for doing a public good.

If they are doing something illegal - the opposite of a public good - then they broke the deal, so those who broke the law don't get limited liability.

On a previous thread someone posted a interesting idea. Every time a company conducts criminal actions, the feds assume X percentage of undilutable ownership. This punishes the company and stakeholders (or stockholders) as it dilutes their equity and if too much illegality occurs the company changes hands (and probably gets spun out as a new public company with the proceeds going back to the public and the original investors/etc still get an acceptable punishment).

We already have this. I was in prison federal prison with some of these guys. What you want is maybe less prosecutorial discretion but mandatory sentences/etc have been ruled unconstitutional in federal law so it would be a tricky prospect when it comes to removing individualized assessments. It's easy to grab a pitchfork after reading an article but their might be realities we don't see that prosecutors (who do this for a living and really really like having scalps to hang) did.

> Government, in a democracy, is supposed to represent the choices of the people. They serve us

And most of us prefer a large and strategic employer not be obliterated over fixable sanctions violations.

"Corporations are a faceless entity with tremendous power, both to harm and to benefit."

So they should be held to an even higher standard.

>Corporations are a faceless entity

This has to change.

>> There is no reason to go into the comments of every post that shows a price of the fee a company paid in order to express why you think a company that is fined should be crippled because of it, the point is to deter people not to lay nuclear landmines for companies to be destroyed over.

> Shouldn't the same logic then apply to people? Yeah, figured as much.

Kinda sorta. There's not an exact equivalence. We don't punish every crime with the death penalty. Also, there are a lot more people than there are hard disk manufactures. "Nuking" a hard disk manufacture over a violation to deter others has a lot more downsides for the national community (let's make WD a monopoly as a deterrent?) than "nuking" a person for a violation.

The idea would be not to punish the corporation itself (a nebulous concept in any case), but to punish the decision makers that made the decision to pursue illegal profits. Fire the executives and the board, as they're the ultimate decision makers, and have the entire set replaced by a team with clearer judgement of the line between right and wrong.

This would accomplish the desired intent without perturbing the number of players in the market place.

If it's costly to the corporations, don't you think the owners would do such a thing? It's not an either or situation, but hitting them at the proper level of abstraction/let the internal "market" forces play it out.

You can't make it costly enough to the corporation without incurring undue collateral damage to a whole lot of people that had nothing to do with it. The point of is to focus the cost onto the actual decision makers responsible for the poor decision making; corporation would continue to survive, without collateral damage to employees and marketplace.

> Shouldn't the same logic then apply to people? Yeah, figured as much.

I like that you smugly answered your question for them. Tilt at the windmills and strawmen all you want I guess.

In my inexpert opinion these sanctions create pressure for China to enter or expand into the sanctioned markets and thereby create more competition with American companies. It seems very short sighted.

China already has been doing that. No need to help them do that.

China is not a single entity. Huawei is not going to choose low quality high price local startup over suppliers with good reputation if they have that choice.

Sanction means those uncompetitive local startups don't have to compete with established players, giving them chance to catch up.

> China is not a single entity.

However it acts like one much more so than many other countries, and especially under Xi jinping.

See also https://archive.is/ZoShw (NY Times Who Owns Huawei? The Company Tried to Explain. It Got Complicated. 2019)

As that article describes, Huawei is effectively employee-owned, though the legal arrangement is not straightforward (because of China's laws on stock ownership at the time Huawei was founded).

The article says that it's claimed that Huawei is... but that it's misleading (virtual shares) and that whenever ask the question dodgy answers are given.

The answers make perfect sense in the context of Chinese law.

This is how Huawei was set up decades ago. They would have had no reason to hide or obfuscate their ownership back then. They used a legal device - the union holds shares on behalf of the employees - to get around restrictions on the number of shareholders in a private company.

> China is not a single entity.

I wish more people knew or understood this. The central government, as much as it wants, doesn't have great control on the local level. It's even enshrined in a Chinese idiom: 天高皇帝遠 or "Heaven is high and the emperor is far away". Furthermore, China's model is actually quite decentralized. There's a lot of freedom at the provincial and local level -- it pretty much has to but the CCP has been able to leverage it to experiment with different ideas at different provinces.

Just wanted to add a tangent on how beautifully expressive and complex the Chinese language and script is.

Yes. It slows them down.

It's like dumping [0], except in reverse. Artificially increase the prices of our exports to our adversary ⇒ protect our adversary's fledgling industry from competition from us.

[0] https://en.wikipedia.org/wiki/Dumping_(pricing_policy)

So Pumping?

I'd say it's more like reverse protectionism. A protectionist demands that his country consume products made domestically.

The sanctionist demands that other countries consume their own products, or those made from a coalition of countries not bound by the sanctions.

Economists used to be mostly in agreement that protectionism is always a net bad, but in the last couple of decades have realized that carefully crafted protectionism can be used to allow domestic industries to develop to the point where they are able to compete internationally.

There are different flavors of protectionism too.

One kind is to pretend to be an open trading nation whilst in reality there are all kinds of "compliance requirements", backroom deals, vague red tape, impenetrable beaucracy such that it is effectively impossible for foreign entities to be successful.

Then after a few years the foreign-owned business is sold off to a local company and the conclusion is that foreigners "just dont know how to do business in that country".

If done right, you get all the benefits of protectionism with none of the retaliation in return.

I wonder if the economists talk much about this kind of protectionism.

it makes complete sense if you view the world through the lens of: 1. china is incapable of innovation and invention and 2. they only know how to steal stuff and 3. their manufacturing industry only makes cheap plastic crap.

All 3 things which are demonstrably false, but the american empire seems determined to continue to shoot itself in the foot

All 3 things which are demonstrably false, NOW.

They absolutely started by stealing things and then figuring out how to make them on their own. But that's no different than how the US built its rocket industry, or how Apple built their OS, or any number of other non-Chinese entities doing the same thing.

Let's not forget the "how it started, where it is now" meme of the whole thing

> But that's no different than how the US built its rocket industry

Wasn't this from military conquest?

> , or how Apple built their OS

And wasn't Xerox compensated with Apple stock?

But sure, reverse engineering happened a lot (Phoenix bios, IIRC).

China is sort of doing the same thing with its contemplation of export controls of rare earths and the like.

The British empire tried to enforce no home-grown industries in certain industries among its colonies by law and by dumping or taxes. Didn't work out so well for either the UK or the colonies. This sort of forced competition through export controls may be for the best all around in the long-term.

Everyone likes to view these situations as USA versus China.

But it's much more USA, EU, UK, Australia, Japan, Canada etc.

There is a widespread, consensus view that China's rise must be managed whilst they continue to be a brutal and aggressive dictatorship.

The United States has invaded more countries than China while having a significantly higher incarceration rate. If anyone is brutal and aggressive, it's the US.

Lets not forget, USA became such a superpower with huge help of World War 2. With operation Tizzard. UK was basically cornered with risk of getting overrun by the Axis so they send all their scientific knowledge to the USA less they fall in the wrong hands. This opened up US to all the foundational knowledge it needed to win the war on be one of the few countries not totally reeling after the war to continue progress.

Joke's on Huawei... the drives will all fail early. Seagate is just fighting for freedom by collapsing Huawei with their terrible drives.

Meh. These probably ended up in enterprise storage appliances like OceanStor. From what I remember the software stack did a pretty reasonable job of dealing with disk failures.

As an unfortunate owner of 2x 3TB Seagate Barracudas that died within months of purchase, your statement is the truth.

So what happens to the corporate counsel who advised on the contract in such cases?

"The company will almost certainly go after its outside counsel."

Can anyone chime in on this? What liabilities does the counsel likely have?

Potentially, they could be responsible for the 300M.

Segate would have to prove that outside counsel failed to use that degree of skill, care, diligence, and knowledge possessed and used by a reasonable, careful, and prudent attorney acting in the same or similar circumstances.

So, just because the attorney got the wrong answer, doesn’t mean they are automatically liable.

Additionally, depending on the jurisdiction, comparative fault may be an issue. Ie, outside counsel can argue, even if we were negligent, so were you, and it’s X% your fault.

I would be really curious to read examples of such disputes. Even legal filings from both sides, evidence, outcomes, etc. Please share if you know of any!

A lot of big companies (like BigTech) usually get away with blatant violations of law or regulations for years, the process of doing something to stop them drags on forever, if it even starts... Except if China is involved. Then 18 months later the whole thing is wrapped and justice is actually served.

It's not just China.

I'm in Germany, and you may have heard on the news that we have a lot of refugees/immigrants from places like Syria who we are trying to integrate into our society. A lot of them are very qualified. Some of them have since gotten advanced grad degrees from German universities.

And then we may not be able to hire them or have to severely restrict them at work, e.g. when we use Qualcomm chips which are under US export restrictions.

I don't have a very deep point to make, except to say that the human costs and the stings that come with the state of the world can go far indeed.

Rephrasing your statement, (current) Syrian nationals chose to go into a field (out of how many?) that they knew was greatly restricted without a change to their (current) nationality, and are then restricted. Nothing to due with punishing refugees/immigrants.

There are also Syrian nationals who worked in the field in Syria already, and this is what they know. Besides, if it was "consult the list of lucrative jobs Syrians can't work first", I don't think it would be any less frustrating for them. Do you like your job/field?

The issue is that their qualifications are not recognized in Germany, so they are not allowed to pursue their profession.

These people did not just willy nilly decide to move to Germany. They had to leave their home country because of a civil war. At least they're safe, but they're being held back by illogical bureaucratic hurdles.

> A lot of them are very qualified.

That statement is quite in conflict with reality.

> Some of them have since gotten advanced grad degrees from German universities.

Hardly any notable amount. It's not the great tragedy you seem to think it is.

Indeed, totalitarian states are well known for their ability to cut through red tape.

Wait, why is it illegal to sell hard drives to China?

Gotta love that good old American "Free Trade"... as long as it benefits them.

Every country limits trade, in general, but especially to countries that are aggressively working against their interest and trying to become a peer competitor when it comes to technology.

How does China “aggressively work” against the US? And what’s wrong with becoming a “peer competitor” when it comes to technology? Wasn’t that the essence of a free market?

Just replace technology with militar capcity, and at the end of the day, the projection of global power.

It's not really about tech, but about what such tech enables. Look at AI / LLMs, think how adversaries having those and you not having them might affect any future disinformation wars, etc

Free trade == good when it undercuts local industries and forces dependency on foreign industry.

Free trade == bad whenever we're getting beat at our own game.

It's only free trade so long as all parties play by the same rulebook.

Seagate - in this article is skank on parade. I don't think lou gerstner or Berkshire Hathaway guys ever had to go around giving themselves props for honestly.

At at the same time: why in the heck didn't the the prosecutors demand all $300 million upfront? Why take installments? Hell, if Seagate can't pay put them into chapter 11/13 and get a judgement to strip assets or cash or stock until paid. Good lord!

The US' (I'm American) biggest suckers have got to be shareholders. The amount of checks that moron ceo's write on shareholder profit without being fired or facing criminal consequences while defending themselves with more shareholder cash for corporate lawyers is insane.

Folks this is why we got rid of royalty.

Seagate isn't the only one. There's bigger but we've got to start somewhere.

Corporations are out of hand. It's the little things too. Wells Fargo "helped me" by sending out my new CC number (Cc was not working) to all known corps so they could charge me. Nah, they helped themselves and certainly never got my permission.

So there will be chinese hard drives soon on the market.

https://www.nytimes.com/2014/03/23/world/asia/nsa-breached-c...

"even as the United States made a public case about the dangers of buying from Huawei, classified documents show that the National Security Agency was creating its own back doors — directly into Huawei’s networks."

So where is the smoking gun about huawei? We hacked their servers in 2014 so where is the public evidence they're evil / in bed with the CCP?

US sanctions are funny: The prime aggressors and occupiers of this planet punishing those who are not sufficiently subservient to them. I don't know how the guy delivering the notice to Seagate of this fine could keep a straight face.

If they sold $1.1B in drives, then shouldn't the fine be larger than $1.1B?

If you’re going off the idea that the fine is based on the value of the gain, then you need to go off of the profit made (bit trickier with staff working multiple projects but hard disks aren’t 100% profit)

If the fine does not exceed the value of the gain, is there any incentive to comply with the law?

Welcome to our globally connected modern world and it's silly rules

The amount might very well exceed the value of the gain. My presumption is that the harddisk industry is a margin business. I would be surprised if they have profits of more than 5-10% of the 1.1b.

My point is that revenue is not gain? Like if I’m a retail store reselling at 10% profit $100 of revenue only represents $10 of gain.

It's a settlement. Maybe the DoC thought the fine should be $600M but they only had a 50% chance of succeeding at trial; getting a guaranteed $300M win is then rational.

> it has reached a settlement agreement with the Department that will see it pay $300 million over five years, in quarterly chunks of $15 million.

> ...Seagate persisted and between August 2020 and September 2021 sold 7.4 million hard drives to China, in 429 transactions worth a combined $1.1 billion.

Useless fine. This is a rounding error to Seagate.

0.3B fine on 1.1B of sales might not seem much, but that probably wipes out all their profits from those transactions.

300m fine on 1100m of sales.

If their margins are under 30ish percentage it would wipe out any profit made on the illegal activity. Personally i think its a rather fitting fine and this model should be used more often.....

Treble damages always seemed fair to me. Have an independent third party determine the profit made from illegal activity (to avoid, or at least hinder, shady accounting practices). Triple it, and that's the fine. Obviously wipes out all the profit, has a punitive aspect to it including a buffer if they successfully hide some profits, and you can spread the fine out if you want to avoid bankrupting the company.

$20 per HDD does not seem like a deterrent. That's probably less than 10% of the sale price.

I wonder if I could smuggle illegal items and pay less than 10% of the sale price when I get caught?

I realize I made a math error.

300 / 7 != 20

$1.1 billion in sales, $300 million in inflation riddled dollars paid over 5 years, I would say it is a good deal depending on the profit margin.

What are the profit margins on their drives anyway?

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