Fines alone will not change them Al-Eqtisadiah newspaper

The issue of imposing heavy and high-numbered fines is still the subject of ongoing discussion and controversy regarding their implementation, as there is a growing trend regarding their imposition as a means of deterring and correcting business and professional behavior. Those who support this type of punishment believe that the most important thing is to deter individuals and organizations from engaging in undesirable behavior. The fear of incurring huge financial penalties is a powerful incentive for change. The use of heavy fines as a deterrent is rooted in rational choice theory, which suggests that individuals will voluntarily choose not to. Engaging in illegal behavior if they believe that the potential costs or penalties outweigh the benefits of their actions.
But rational choice will not be activated unless the theory of deterrence is activated correctly. They are interconnected, as it must be specific and general deterrence, and this type of specific control aims to prevent the person who has already committed the crime from committing it again by imposing punishments such as Heavy fines. The negative experience of this trend and its pain will deter the offender from repeating his actions in the future. In contrast, effective deterrence comes by preventing potential criminals from drawing a mental picture of the dire consequences when committing criminal behavior. It is noted that applying these theories to any fine correctly is the guarantee of compliance. If any fine cannot address the concept of rational choice, it will not be effective, regardless of its value. The feeling of pain from not adopting the behavior is much greater than the feeling of pain from doing it, and while one of the The arguments supporting heavy fines as an effective deterrent are that they impose a large financial burden on violators, making engaging in illegal activities less attractive to them, especially if this is coupled with a perception of the risk of arrest, which also plays a crucial role in the effectiveness of heavy fines as a deterrent. If individuals believe that there is a high probability to be arrested and face severe financial penalties, they may be more inclined to abide by the law. However, the relationship between rational choice and deterrence is the most prominent, especially in the business world. Empirical evidence has indicated that organizations view the risk of imposing heavy fines as a cost of doing business, rather than a reason to change their behavior, and they usually pass on consumers the tax of these fines. , or borne by investors in the form of declining returns. One of the fundamental drawbacks of heavy fines is that they may exacerbate inequality. Those with greater financial resources may be better able to absorb the financial burden of a heavy fine, while those with fewer resources may They are more likely to be exposed to financial difficulties, and large organizations that have a broad base of lawyers and jurists have multiple means of avoiding these fines or procrastinating their payment, while those who do not have such an army of jurists fail, so the less fortunate avoid these criminal behaviors, while the adults continue. In this regard, there is inequality in returns due to monopolies and the exit of committed companies from the markets. The ultimate form of excessive fines is the removal of committed companies from the markets.
In an in-depth report that talks about the extent to which these excessive fines affect the behavior of giant technology companies, Al-Eqtisadiah provided experimental evidence by tracking the behavior of these companies in exchange for the fines imposed on them, either due to setting prices, removing competitors, or misusing data, and the report showed It is clear that it will take years before these companies pay a single penny. For example, the Irish Data Regulatory Authority says that Meta has not paid any of the fines amounting to two billion euros ($2.2 billion) imposed since last September. For its part, the Luxembourg Data Regulatory Authority stated that “Amazon” is appealing the decision to impose a fine of 746 million euros since 2021, and “Google” is maneuvering with regulatory authorities in the European Union, objecting to fines amounting to more than eight billion euros due to misuse of its position in the market. Between 2017 and 2019. For its part, Apple has been fighting for years to pay a French monopoly fine amounting to 1.1 billion euros, and was ordered to pay taxes worth 13 billion euros to Ireland. Thus, the report confirms that fining technology companies does not stop their bad behavior, but rather it goes beyond applying the rules against them, which supports the behavior of… These companies, those accounting rules that allow them not to recognize these fines as losses as long as they are pending in the courts, which gives them a great opportunity for many years to avoid the impact of these fines on their financial statements, and thus continue to pay returns to investors, and maintain the flow of funds from lenders, no matter how much they are. The value of these fines will not be actually applied. At the same time, imposing these fines through laws that criminalize behavior puts many national companies under the penalty of the regime. If they comply, they lose, and if they do not comply, they lose as well, while these giant companies do not comply and are not affected, so many analysts see the application of alternatives. Heavy fines, including providing incentives for positive behavior, so that those who comply achieve more benefits than those who do not, including providing tax exemptions or other forms of support to individuals and organizations that engage in desirable behaviors, and this also includes applying the approach based on repairing the damage resulting from committing Violations, instead of punishing the perpetrator of the violations. Regarding technology companies, some experts call for measures to be taken that directly target basic business practices and algorithms that lead to harmful behavior, impose restrictions on the use of data, and hold executives and company leaders accountable and prosecute them directly.