Huge Government Fines are Just the Cost of Business

It’s cheaper to get caught than to do things legally in the first place.

Photo by Jp Valery on Unsplash

Amazon has been accused of more corporate chicanery, this time for using shady practices to enroll people in Prime and making it difficult to cancel it. This is on the back of recent court decisions to the tune of $31 million for two separate privacy violations.

The thing is, a $31 million fine is a rounding error compared to the $127.4 billion in revenue for the first quarter of 2023. Their net income was $3.2 billion that quarter, which puts three months of their profits at literal orders of magnitude higher than that fine.

This is typical these days — it feels like we can’t go more than a week or two without hearing about some big company or another getting fined millions of dollars for horrible and illegal practices. Whether they’re engaging in monopolistic or monopsonist practices, cheating customers, or just committing various other crimes, huge corporations seem to lie, cheat, and steal constantly.

They get caught a lot, of course — there is only so much that one can get away with in a world where the internet exists and anyone can email anything to anyone else. As such, whistleblowers abound and a lot of big corporations are made to pay fines to the government and restitution to their customers. We’re talking eight- and nine-digit fines here.

The thing is, companies like Amazon have revenue in the billions and market caps in the trillions, which makes a measly eight-digit fine mean essentially nothing. Yeah, Amazon may face a fine of hundreds of millions of dollars for this nonsense, but that’s nothing compared to the money they made using deceptive practices.

Seriously, in that quarterly report I linked above, they made nearly $10 billion in subscription fees in Q12023. That’s three months of Prime fees and other Amazon subscription services such as Kindle Unlimited. A $100 million fine for that would be 1% of their revenue from just Prime for one quarter.

Prime launched in 2005, 18 years ago at this point, and if they’ve been using these practices for even half that time, how many hundreds of billions of dollars have they made using these deceptive…