They said revenue but they don’t understand what it means. Only a few percent of that revenue is actually profit - perhaps there is no profit depending on the market. It’s an especially tiresome thing to point out since probably more than half of HN readers are paid a salary out of these kind of revenue figures.
The law provides for fines to be a percentage of turnover.
A fine as a proportion of profits just reduces your profits by a few percent; as long as your profits are still huge, it doesn't matter, and you pay up. If it's a percentage of turnover, you might well end up with losses for that year, and no profits at all.
The regulation is designed to make your shareholders sit up, and put pressure on the board to come into compliance. It was targeted at turnover rather than profits for obvious reasons - corporate accountants are very good at making profits invisible. And turnover is relatively easy to measure.
[Edit] Changed "revenue" to "turnover" - "revenue" was an alternative fact.
It's unfair to assume they don't know what revenue is. Comparing it to the revenue is perfectly valid. Amazon famously didn't make a profit for many years, does that mean that they couldn't afford any fine during that period? I think it implies that the profit of a company is a poor indicator of their wealth and what they can afford.
The person seemed to be implying as if they were making the money back in 1 day otherwise this comparison would be meaningless, as they can have infinite revenue, but 0 profit.
Who's better positioned to pay a fine, an individual contractor who makes $1mil profit in a year or an unspecified company that makes no profit but has a >$1B market cap and high revenues?
It feels like the person I replied to first is so eager to assume others don't understand the difference between profit and revenue that they miss the forest for the trees.
I think it is unclear because the top level post didn't make a conclusion, just threw out a fact.
If the implied conclusion is the fine won't hurt or have an impact because revenue >> the fine, they are missing the relevance of comparing the fine to profit.
I'm not sure what other conclusion they would want people to take from the fact presented
The fines are obviously not intended to bankrupt them.
Amazon had $7.8 billions in profit this quarter, 10% of that should hurt badly enough to course correct, shouldn't it?
It's worse than that. Almost all of Amazon's profit comes from AWS and its US business, but this fine is entirely a cost due to its retail business in the EU.
The operating income of Amazon's international retail business in 2020 was just $700m, it makes their entire European business last year overall unprofitable.
Holy crap, what do they even do with that money? I'd love to read more about this. They have 615,000 people living there, meaning they get 55,000 USD in gov revenue per person.
For comparison, the US gov got ~8,750 USD in rev per head in 2019.
> Holy crap, what do they even do with that money?
Free public transport for one.¹
I holidayed there a couple of years ago before they made it free and even then, it was still heavily subsidised. It cost only €4 for a ticket that covered bus, tram or train to anywhere in the country for that day. Even in rural areas, buses were travelling every half hour from early morning until late evening. It was great for long hikes (or kayak trips) and returning by bus. I loved the freedom of it all.
What matters isn't really the government revenue but the government spending. The discrepancy is a lot smaller for the latter metric. In 2020, the US government collected 10.5k/person but spent 20k/person.
