We don't need to put CEOs in prison for making consumer-hostile decisions, we just need to also make those decisions bad business.
Corporations aren't people--they can't make the decision to do unethical things. Yes, I understand the law, I'm saying the law is incorrect. People do unethical things, and people should be held responsible for their actions.
Fining decision-makers might be an acceptable alternative to jail time, as long as the minimum fine is some sort of multiple of profits gained, to prevent criminals from just figuring a slap on the wrist fine into their decision-making math.
No they don't, they get passed on to shareholders. The market cap of the company decreases by the amount of the fine (plus any predicted future effect of the lost money) and the stock price goes down to reflect that.
If the company could get away with paying workers less or decreasing its workforce in order to boost profitability, it already would have. It's not waiting for a fine to justify doing so.
Ehh, if they have to, but execs are going to do their very best not to pass on costs to shareholders.
Even if shareholders foot the bill, why would that be a desirable outcome? Are you arguing that we have to fine corporations instead of holding the decision makers responsible? What do you have against people taking responsibility for their own actions?
> If the company could get away with paying workers less or decreasing its workforce in order to boost profitability, it already would have. It's not waiting for a fine to justify doing so.
But they couldn't pay workers less or decrease workforce, because they needed those workers to execute the unethical business plan. They weren't waiting for a fine to cut workers, they were waiting for the cash cow to stop producing milk to cut workers who were necessary to keep the cash cow going.
But it's not up to execs, execs don't control the share price, no matter how much they wish they could. The market does. The market sees the fine, it adjusts the market cap, done.
> Even if shareholders foot the bill, why would that be a desirable outcome?
Because shareholders elected the board. That's the entire foundation of joint-stock corporations, that shareholders get the rewards but also suffer the losses.
Why would there be a 1 to 1 relationship between the price of stocks and reality, when most investing is blind passive investing that ignores reality by design?
Stock prices are not rational and there is no consistent way to calculate the value of a company. An expensive media campaign that accomplishes nothing related to their business offerings and may even lose the company significant amounts of money can end up raising a stock price. And you also don't have unlimited time to try and wait out stocks which also have so many other random factors being thrown in over the years.
Not directly, but surely I don't need to explain to you what effect cutting costs typically has on share price?
> Because shareholders elected the board. That's the entire foundation of joint-stock corporations, that shareholders get the rewards but also suffer the losses.
Sorry, I'm missing the part of this where you answered the question. Why is this a desirable outcome? What is the problem with holding human beings responsible for their own actions?
I don't give a fuck about the foundation of joint-stock corporations. If the foundations of joint-stock corporations result in sociopaths profiting off harming people with no consequences, the foundations of joint-stock corporations need to change or be discarded completely.
Surely you do, because sometimes the stock goes up if the workers weren't needed in the first place, sometimes it goes down because it shows the company is flailing, and sometimes it does nothing because it's business as usual.
You're operating under an illusion that execs have control over how the market will respond.
> Sorry, I'm missing the part of this where you answered the question.
And I'm missing the part where anything I wrote gave you the excuse to be rude. Please be civil, this is HN.
this is the KEY thing that is always missed.
shareholder happiness level: monitored at all times, a KPI of utmost significance at the most senior levels.
worker/employee happiness level: monitored at the Q{1-4} level at best, a KPI of least significance at all levels.
A 0.33L can would’ve been too little, but a 1L bottle too much, and a 1.5L bottle far too much. 0.50L was the perfect size.
The pricing?
0.33L - €0.66 (€2.00 per L)
0.50L - €1.48 (€2.96 per L)
1.00L - €1.93 (€1.93 per L)
1.50L - €2.09 (€1.39 per L)
Initially this made me angry, as it is very clear they figured out that the 0.5L bottle is the most convenient size, and put a huge premium on that, as people that need that size (for say, in a backpack) will pay it for lack of alternative. In other words, the price the market will bear.
But then I reminded myself, modern companies will always try to give you the least amount of value for the highest price the market will bear.
This is also why you should never feel bad if you can get one over on a company. Pricing error that gets you expensive shoes for €1? Screw ‘em. Contractual obligation that effectively gives you lifetime for €1? Screw ‘em. They’ll do the same to you whenever they can.
I wish businesses believed in being synergistic with their customers and nurturing loyalty, but alas. Not the times we live in.
Also pretty much everyone: Wait, the decisions businesses make that affect me absolutely suck!
I recently saw a £700 bicycle carbon fork on sale for £70, new, the shop just forgot a zero. I didnt buy it out of feeling bad :(
If a company like Amazon mispriced something that way, I'd gladly buy it.
Modern consumers will always try to pay as little as possible for the highest amount of value they can.
The proper term for this is The Law of Supply and Demand. It's how markets work.
BTW, your anecdote illustrates why making the effort to learn some math while in grade school is worthwhile.
As an aside, the example would be even more dramatic with non-sugar, where the 0.5L bottle is €1.88, but the 1L bottle is €1.95, due to both the price premium of ‘convenient size’ and ‘healthy alternative’ being stacked.
That's not how S&D works. S&D is in-play even if Fanta had a monopoly. Even if the prices were set by the government. Governments have tried every scheme imaginable to repeal the law of S&D, but they never work.
BTW, I gave up all soda about 15 years ago. It took about a year to finally stop craving it. I no longer have any desire for it.
Besides the health issues, it has saved me a ton of money in aggregate.
Soda for me is a guilty pleasure, like a good barbecue, or a bottle of red wine. But I appreciate the heads-up!
Purely in theory in a vacuum, yes. In practice, you'll have a very hard time finding examples where that actually happened. At best, the stock takes a momentary dip and next ~week it's back to where it was.
But so what if the stock is back up the following week? More things happened over the following week. You're missing the fact that it would have been up even higher if it weren't for the fine. (Alternatively, the stock also might go down even further the following week. But similarly, it wouldn't have gone down as much if not for the fine.)
This is not theory, this is how stocks actually work in the aggregate. If they didn't, you'd be able to make a lot of easy money off the stock market otherwise.
Also, they _are_ cutting employees. There have been a lot of layoffs recently, and some of them have explicitly stated it'd not because they can't afford those employees.
Yes HP is laying off employees just like pretty much every other large tech company right now. Which shows you it has nothing to do with fines, and rather everything to do with industry-wide overexpansion during COVID and high interest rates now.
Exactly!
I don’t know how to deal with people who talk about the economy in terms of a perfect competition free market where all participants have full knowledge and are all equal in terms of power. If a physicist talked in terms of zero friction or spherical cows, we would laugh them off and never listen to them again. And yet people continue to talk about the economy with these assumptions that make zero friction and spherical cows look like practical applied physics.
Because it isn't true.
Another word for lack of knowledge is "risk".
The amount of risk is factored into the price of everything you buy and sell. For example, a name brand item sells for a higher price than a generic item because the name brand carries with it less risk for the buyer.
Note that "perfect information" is not part of the definition of it.
A business needs a certain number of workers for a certain output. Those workers need to be paid a market amount for their skillset, for the amount of output. If the company does not have the funds to pay them - due to fines or competition or any other reason, the company lays off workers and reduces output and revenue - giving those sales to competitors, or goes out of business.
Yes, if the solution to "we broke printers" is to refund every single affected sale, the company will lay off workers, reduce output, and close down if that happens enough. Their competition will increase output to fill the unmet demand, and hire workers.
That literally is the point of the fine, and is a good thing, not a bad thing.
This is like "if you raise the minimum wage we'll only have to lay people off" which is equally self serving and utterly, completely wrong.
Employees dont pay. Shareholders pay. If they could have fired 1 employee and collected a bit of extra profit they would already have done so.
But they couldn't pay workers less or decrease workforce, because they needed those workers to execute the unethical business plan. They weren't waiting for a fine to cut workers, they were waiting for the cash cow to stop producing milk to cut workers who were necessary to keep the cash cow going.
- Layoffs - Demotion - Canceling of raises - Canceling of promotions - Reduction in perks and other business benefits - etc
A lot of corporate bad behavior would be fairly easy to stop by making it a cost rather than a benefit. Things like an improper denial, you owe 2x the amount. Late payment, you owe say +20% plus a high interest rate on the delay. Fairly routine things you have a clock that's tolled while the other party is actually responding to requests for information, not transit time. (From when they receive it to when they respond. Thus they'll do everything electronic unless original signatures are required.) Clock runs out, that's considered an approval.
True, but only when the cost is greater than the profit from doing whatever it is you don't want the business to do. From example, if paying a bill late comes with a 20% premium, but not paying it increases profit by 21%, then it's better to pay late.
In the system of modern business it's really hard to see why things happen, so simple rules very rarely work. People are hugely creative when it comes to dreaming up ways around them.
I understand what I am advocating might seem against existing case law about LLC and as I’ve said before I am not a lawyer so it might not be something straightforward to codify but I know it is possible if we have the will and we make it a priority.
I would hope we should have the owners of our economy, the 0.0001% of the population on our side on this matter because upper management is robbing them or they will if we institute reasonably high enough fines instead of prison time.
Did these people continue to maintain the processes and rules enacted by their predecessors? If so they aren't "left holding the bag", they are the remaining beneficiaries of the system. If you are one of the few who have the power to stop something but you don't because you benefit from the status quo, you aren't a victim. You are the perpetrator.
I know you said few and I am moving goal posts here a little but it isn’t always the “big guys” who suffer either.
Will you volunteer to tell the retiring teacher or firefighter that they will have to starve because you’d rather punish the ultimate perpetrators rather than hold the actually guilty (the then CEO and the board) accountable to the law?
I would. And firefighters and teachers are used to getting fucked by everybody anyway. (mom is a teacher, and have several friends who are firefighters).
But in reality, big union funds, invest only a little bit in any one company, so no, some big company loosing some of it market cap, would make little difference to each individual teacher and firefighter.
PII data identifying, documenting it, and periodic review's of that is becoming standard procedure.
I remember when GDPR was announced, where for most projects, there was not anyone who could tell you for any given project, what all data is being collected and stored where.
So GDPR did have positive* effect at least with the part of the market I am familiar with.
* As in positive for people privacy
For this case, computing back:
94M printers are sold per year.
HP’s market cap is $29 billion.
So, fine them $1000 per printer they sold that has any sort of anti-third-party ink mechanism, payable direct to consumer. (This seems about right to me. It’s less than 10x the retail price of a printer.)
Production of a receipt or a picture of an HP branded printer serial number should be all that is required to obtain the $1000. If they fail to pay in 30 days, individuals can use the mechanism where the sherrif walks into an HP office and takes $1000 worth of stuff on behalf of the claimant.
After 12 months, any unclaimed money gets sent to charity.
As appropriate as that would be, I’d rather see the CEO and execs that approved this stuff go to federal maximum security prison for life than for all the unrelated HP employees to lose their jobs. (Though, arguably, their services would be better used elsewhere.)
Did I read this correct? Do consumer printers cost over $10k where you live?
i think he is saying $1000 = 10 x (retail price of printer). which would mean the retail price of a printer is $100
I hardly think that issuing any fine would make them care. Why would the CEO give one little tiny shit about a million dollar fine, or a ten million dollar fine for that matter. They just pass it on to the consumer. And that is only passing on the cost of the fine only to the ink division. They could easily pass on the costs to all departments.
Fines are silly and useless. I guess if they were to have a $500 million fine, that would get the company's attention, but I don't see that ever happening, honestly.
But I think if they put the C-suite and board of directors into jail for 8 years, that would have a major effect on all boards and executives.
And right now, corporations are claiming supply chains and inflation for raising their prices, yet they have the largest profits ever. This can only mean that they are raising their prices but their costs are staying the same or rising very little. All of them should be put in prison - robbing the poor and middle class to put that wealth in the hands of the rich. More siphoning money from the poor and middle class. Put them in prison, I say. Make some example. This is not about price controls, but against holding the US population hostage. Is there collusion? Because that is against the law. That is not controlling prices. Collusion is collusion.
Fines work great as long as they're sufficient enough to disincentivize the relevant behavior! If you made it so that any printer that you disabled cost more to you than one left enabled, then the business would absolutely change course, no huge single-time fine required.
> But I think if they put the C-suite and board of directors into jail for 8 years, that would have a major effect on all boards and executives.
Agreed, but I think that effect would be extremely detrimental to society (capital punishment for misbehavior also has a big impact, and is pretty clearly not the kind of thing we'd want.)
If there is currently a criminal law that the CEO is breaking, then by all means they should be tried. If we're just trying to end business practices we don't like, though, regulation and monetary disincentives are the way to do that.
Making an example of someone should only be done insofar as they've broken the rules. If we don't like the way they're acting while following the rules, the rules are the things we should change.
The basic reason is that the US (and the Western World) has gone through deregulation to re-monopolization, so consumers face monopolies or oligopolies in most major markets and these entities basically make their money by selling their products as "services" in the chunk-size that makes a consume most desperate - IE, Hp will fight forever to sell 100 prints for $30 rather than 10000 prints for $120 and only hard threats can stop them (and we know the shit MS does - if MS could charge an ambulance a fee to keep their heart monitor software from killing them, they would, etc).
If a big-time CEO does this, he gets a fay bonus
What property was destroyed? The HP printer still works with genuine ink cartridges and the third party ink cartridge will work for printers that don't require genuine HP ink.
I imagine there isn't an existing criminal law covering that and I'm not in favor of interpreting criminal laws creatively to expand their scope, however I could be convinced to support making a new criminal law to cover this kind of behavior.
[0] No doubt, they have some fine print in a clickwrap agreement giving themselves permission.
If fines grow/shrink, then people will think "what are ways to get around these fines?" or more commonly "Are these fines larger than the profit I would earn?". Even if fines are increased for now, that's a temporary thing, and not everyone would care.
A CEO doesn't personally care about extra fines costing the company; that can be a "calculated risk". CEOs are very well paid and fines are generally an inconvenience. But these people cannot buy time; threaten to take away years of their life, and see how the underlying value structures change.
Maybe we don't need to, but we should.
Maybe we don't need to, but let's.