Big Tech Companies Generate Billions in Fines, but Delay Payments
Tech giants such as Amazon, Apple, Google, and Meta (formerly Facebook) have been consistently fined for various offenses, including price fixing, anti-competitive behavior, and data misuse. However, it often takes years before these companies actually pay the fines.
Meta, for instance, has not paid any of the two billion euros ($2.2 billion) in fines issued against them since September last year, according to Ireland’s data regulator. Similarly, TikTok also owes hundreds of millions in fines.
Amazon is currently appealing a 746 million euro fine from 2021, as confirmed by Luxembourg’s data regulator. Google is disputing EU fines worth over eight billion euros for abusing its dominant market position between 2017 and 2019. Apple has been fighting against a 1.1 billion euro antitrust fine in France and an order to pay 13 billion euros in taxes to Ireland.
This issue is not limited to the big four tech companies but extends to tech firms of all sizes globally. For instance, X (formerly Twitter) in Australia has failed to pay a fine imposed for not outlining plans to combat the distribution of child sexual abuse content. X is now counter-suing.
Margarida Silva, a researcher at the Centre for Research on Multinationals, noted that big tech companies have a history of challenging enforcement of rules against them. They often delay payments, even if they ultimately lose, in order to burden administrations with years of legal proceedings.
This behavior sets the tech industry apart from sectors like finance, where there is still an incentive to pay fines to maintain public and investor trust, argued Silva.
However, Romain Rard, a lawyer at Gide Loyrette Nouel in Paris, explained that it is common for companies to appeal significant penalties. Ignoring fines and challenging decisions without paying is not a feasible strategy.
There have been instances where companies have successfully appealed billion-dollar antitrust fines in Europe. Chip firms Intel and Qualcomm recently had their fines overturned or significantly reduced.
It is worth noting that Europe’s system differs from other jurisdictions like China and the United States. In Europe, fines often follow a lengthy process and are announced as settlements.
Facebook paid a record $5 billion fine to the Federal Trade Commission (FTC) in 2019 over the Cambridge Analytica scandal. Alibaba, an e-commerce giant, immediately paid a nearly $3 billion fine to Chinese regulators in 2021.
Activists argue that these financial penalties have little impact on these wealthy companies. They also criticize the inconsistent application of rules across different jurisdictions.
Max Schrems, an Austrian lawyer and data rights advocate, believes that the issue is exacerbated by lenient appeals processes and inadequate fines imposed by the Irish Data Protection Commission.
In response, Graham Doyle, Ireland’s deputy data protection commissioner, defended the commission’s record, stating that fines are just one aspect of their investigations. He emphasized that corrective measures are also imposed, citing the case of Instagram’s handling of children’s data.
Activists assert that fines alone cannot solve the problem and call for competition regulators to take stronger action. They urge regulators to prevent future mergers and acquisitions in the tech sector and potentially consider breaking up these companies.
AFP has reached out to Meta for a response on this matter.