Even for a giant like Qualcomm 1.2B fine is far from a slap on a wrist. Furthermore, it's the first fine, imagine if they try to continue such practice in EU, more and bigger fines would follow. So yes, EU is probably the only jurisdiction in whole world that does take anti-monopolies and anti-competitive cases seriously.

We have a maximum amount you can fine a company. It's "10% of the total turnover in the preceding business year of the undertaking". So whether it's worth breaking the law becomes a simple napkin calculation.

(Source: http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELE...)

How often can they apply a fine of that amount?

If they can apply it yearly, they can fine 2.2 billion per year, which is over a third of Qualcomm's 5.3 billion per year profit.

Sure it's a simple napkin calculation, but as long as the napkin calculation comes out to "not worth it" that's fine.

Source for numbers: http://markets.businessinsider.com/stock/QCOM/financials

Well yes, but that's only a fine, I'm sure there are other legal means (i.e. voiding business license) for those who refuse to comply with a law continuously.

How it went down with Microsoft was cumulative fines as time goes.

I wondered what the ultimate reason was for Microsoft to bow down and apply the required changes to windows, but I imagine being labeled as a recurent law breaking business might have a lot of side effects.

At a very small scale, I knew engineers that didn’t want to apply for MS jobs because of that. I wonder if individual states or other regulation agency also would change their stance regarding a company once behavior change requested by the EU are ignored on a regular basis.

How would that work with a company like Qualcomm, that doesn't sell directly to consumers, and whose products are embedded in devices manufactured outside the EU? Technically, wouldn't it only be doing business with Apple?

Revoke the EU certification for the specific devices they manufacture

> Qualcomm made 122.5 billion in the last 5 years[2]. Making them pay 1% of that for breaking the rules isn't what I would call "taking this hard stance on antitrust".

1. That's their revenue not their net income, which looks to be 20~25% of revenue.

2. Indexing the fines on revenue from the domain/division where improprieties happened seems logical.

1. The fine seems to be based on their revenue. 1.23 billion are a little over 5% of 22.291 billion. (I don't know where the 4.9% come from.)

2. It seems logical but it isn't. In you're a rich kid that starts selling drugs your fine is going to be based on all the money you have, not just the money you made selling drugs. That makes all the sense in the world given that the fine is supposed to hurt you financially in order to change your behavior.

Corporations are not individuals; they can split and merge. You don't want your regulatory penalties to be gameable by restructuring the company (e.g. having a separate subsidiary handle European business).

The idea here isn't to be punitive, but to change behavior. A smaller fine, with the possibility of more for continued misbehavior is far more effective.

If turnover is _revenue_, not _profit_, which is as I understand it, then this is a very significant amount of their profits.

> isn't what I would call "taking this hard stance on antitrust"

I guess by hard stance, I more meant any stance at all, instead of simply bowing to threats by multinational corporations. It's very refreshing.

I'm glad we're doing something too, but as long as breaking the rules is a viable business strategy I don't expect anything to change.

This is an EU fine, but Qualcomm is a worldwide company. So, they could face legal issues from other countries over the same issue. Further, it's not like they only made money from this. So, the calculus in Qualcomm's case is extra profit > fine not total profit > fine.

Also, you're quoting revenue it's profit that's important.

PS: If the US choses not to take their own piece of Qualcomm's illegal profit's IMO that's on them.

White collar crime. It pays!

Shouldn’t the CEO go to jail? That might make them behave themselves, and possibly go some way towards justifying their astronomical salaries.

>Shouldn’t the CEO go to jail?

No. While it's always tempting to bring out the torches and pitchforks and go straight for the emotional response, please try to keep in mind that specifics in law matters because it affects the rights of the regular person far more. Criminal and Civil violations of the law are not the same thing for very good reason, and that's not a matter of white collar vs blue collar or any other color of collar. We want to discourage civil violations, but in general those are things where the situation can be made whole purely through money. There are no victims of non-reversible physical harm. Qualcomm's violation is not the same thing as dumping carcinogens into a water supply or VW's pollution or worker safety violations or cutting corners on life-safety product requirements or whatever. It's not even clearly market damaging to the level of situation's like Intel's actions vis-a-vis AMD. It's a violation and one they should have caught, but at least mildly fuzzier, and the violation is already over not ongoing. A sizable fine, investigations into more, and the threat of larger ones in the future seems a genuinely reasonable response to a situation like this absent continued patterns of bad behavior.

Seriously, we have way too much criminalization of things that should be civil violations already. There are certainly many times that people in power get away with things that should be criminal and we should be trying to bring them into line with what applies to everyone, but there are also a lot of times where people in power get away with things that shouldn't be criminal for everyone. In that case the common feeling of "bringing them down to our level" is backwards, we should instead be working to bring the standards for everyone else up. Both are equalization of advantage, but that doesn't make them an equivalent end result. Prison is not something we should ever be in the habit of reflexively resorting to.

> Seriously, we have way too much criminalization of things that should be civil violations already.

Do you think that perhaps this has to do with the much larger pool of resources put behind criminal prosecution vs civil?

I don't really care if the CEO goes the prison or not. If they personally pay a fine so great that they will be impoverished for the rest of their life, that would be good enough for me. The point it that no-one has actually been punished here. No-one will personally suffer in a way that they would even notice. There is no deterrent.

I also disagree that there are no victims. Money and the lack thereof has profound effects on people's lives. People get depressed, get divorced, commit crimes and commit suicide due to the inscrutable flow of capital into and out of their lives. There are victims, somewhere. We just don't know who they are.

Why just the CEO? How about the CFO, the Board of Directors, and Chief Legal Consul? Maybe you could say the CEO is the last line and should be held accountable. It seems to me that you can't really do that since so many people could have been involved or even shielding the CEO from knowledge of the illegal activity. It's probably too onerous to investigate the individuals responsible.

I don't think you are wrong, there should be individuals held accountable.

I agree: start at the top and burn down through the executives and the board until the people that are left (and the ones that fill the gaps) don't want to risk doing shady/anti-competitive/etc stuff.

We will nothing, and we will fix nothing by slapping these companies on the wrist and then letting them go back to what they're doing.

Shouldn't the fine be based on the gains they wrongly made rather than how much they made in totality?

Then it would become a compensation, not a fine; they'd just lose a bit of the profits they (wrongfully) made, but it wouldn't discourage them from doing it again - I'm sure that for every instance of things like this being found out and fined, there's ten or a hundred instances where companies get away with it.

I am not saying that the fines be less than the wrongful gains, just based on those gains. They could punitively be 3x those gains.

It does not seem right to base the fine on the total revenue or profit of the company, which may include many other product lines and businesses.

For me it's fine to do so. Just don't do it. Bonus point it avoids back- and forth-reckoning "minimizing" the profit for this particular offense. We would get stuck with a similar problem we have with taxes.