[matheusmoreira]

It wasn't just evil, it was a calculated power move. They understood the fact it was wrong, calculated the risks involved and even the damage it would cause if they got caught.

The only effective punishment for those is to calculate how much they gained from it, calculate all profits that resulted from those gains, subtract all that from them, and then apply some huge fines as well in order to leave them in an even worse position than they started. Basically reset the company to the position it was in before this move, and then make that position worse. Like rewinding a chess game but they also lose a rook or something as punishment for their audacity.

[wsc981]

The people that facilitated this behavior and got wealthy from it, the C-suite people, should be out in prison for this as well, as well as be forced to pay a huge fine.

This should serve as an example for other companies not to behave in the same way.

[samhw]

Agreed. This is straightforward fraud: they promised to find the lowest possible prices, and instead deliberately overcharged people in order to line their own pockets. In a properly regulated industry, this would be a violation of their fiduciary duty, which is punished extremely severely.

[ctack]

You would be hanged in some countries.

[webmaven]

After the company pays the fines, a shareholder lawsuit could (in theory) force the board to claw-back executive compensation.

[matheusmoreira]

Indeed. Anything less than this is a slap on the wirst that will change nothing.

[webmaven]

> The only effective punishment for those is to calculate how much they gained from it, calculate all profits that resulted from those gains, subtract all that from them, and then apply some huge fines as well in order to leave them in an even worse position than they started.

From a practical (and economic/game-theoretic) perspective, you need to insert a risk adjustment (by which I mean, if their odds of being caught were 50%, you need to divide the fine by 0.5) and a net-present-value adjustment (if an additional dollar earned at the time of the violation is worth 80 cents at the future time of the judgment, divide the amount by 0.8) prior to the calculation of profits and the addition of punitive fines to be truly effective.

[matheusmoreira]

Why? Sounds like we should do the opposite.

1. True justice would have been 100% chance of them getting caught. Since it was not 100%, it means they took advantage of some inefficiency in the system in order to get away with it. They should be punished for this disrespect through bigger fines. The less risk there was to them, the bigger the fine.

2. They earned dollars years ago. Today's dollars are worth far less. Therefore the fine, calculated based on that year's profits, must be adjusted upwards to compensate. Just like their profits must be adjusted upwards for inflation in order to make sense of their value in terms of today's dollars.

[hn_go_brrrrr]

You're in agreement. 1/0.5=2

[matheusmoreira]

Oh. You're right. I think I misread the post and replied too impulsively. I apologize.

[webmaven]

You're right about the inflation adjustment (which is separate from a net-present-value adjustment). I guess I was assuming constant-dollars.

To be clear, net-present-value is the bird-in-the-hand principle. A dollar now is worth more to you than a future dollar, EVEN IF YOU ASSUME NO INFLATION.

https://en.wikipedia.org/wiki/Net_present_value

[martin8412]

I would not base it on profit. I'd say a fair fine is income multiplied by three. It should really hurt.