EU considers calculating X fines by including revenue from Musk’s other firms
EU considers calculating X fines by including revenue from Musk’s other firms
Musk could face DSA fines of up to 6% of global revenue—including SpaceX sales.
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It’s easy to support when Elon is the recipient, but is this a good precedent to set?
Unironically, yes. You shouldn't be able to shield your actions under a different corporate umbrella.
"Oh, guess we can't fine them much because Twitter is a money pit, so they'll get to continue breaking the law for cheap"
Nah, make the fine off of his entire net worth, make him cash in some of that stock so he can finally pay taxes and fines. Make it hurt enough for him to consider not breaking the laws of countries he wants to do business in.
Sounds good in principle, but isn't the one of the main purposes of creating an LLC or Corporation to shield your personal assets from the company's finances? Everyone cheers for these policies until you're the one they're coming for. I hope you're as cheerful when the government wipes your personal bank account as consequence of your company's affairs.
The problem is if we give major companies a way out, on the off chance that it might have a benefit for the little guy... those major companies end up stepping on the little guy anyway.
So why let them shield themselves from the consequences of their action?
There’s no need to give a company a “way out”. The government can be as harsh as it wants to be within the limits of the law. But as soon as you start targeting the owner when he is supposed to be financially protected by the law, there are worse consequences in the long term. No matter how much they personally fine Elon, he has infinite money, this doesn’t really hurt him and I doubt he cares since he seems more focused in helping Trump win than helping X (or himself) succeed.
Gotta ask, what would you propose that would curb Elon from willfully committing crimes as he is?
He continues to do so because he's proven the system is broken as soon as someone is sufficiently wealthy. He fights the charges, then when that runs out he fights the amounts, and even when he does get his comeuppance to the tune of 44 billion, he's an even bigger brat cause he finally got stood up to. Do you think that there's a way to systematically even the playing field?
Gotta ask, what would you propose that would curb Elon from willfully committing crimes as he is?
I’m not a lawmaker so I don’t know. And it hasn’t been dealt with by those who are because it’s not an easy decision. But the solution can’t possibly be allowing governments to damage the owner’s personal finances for choices at the company level. Truth is you can’t open this road for Elon Musk and never use it again, because that’s never how it goes down. If this is allowed to happen, more people will be unwilling to open businesses because the only protection that they’re supposed to have can be completely ignored by the government. Governments are as predatory as mega corporations, and neither can be given too much power. This takes away power from the companies and gives it to the government, not the average citizen.
Do you think that there's a way to systematically even the playing field?
I don’t know, and nobody else knows.
To clarify the cost of creating an LLC is a hundred bucks more or less depending on the jurisdiction. So Elon should be allowed to create "Musk Corp Oct2024 LLC" and then say or do anything under the guise of Musk Corp Oct2024 LLC, then if he's sued or fined just declare bankruptcy and create "Musk Corp Nov2024 LLC" and do whatever he wants?
At some point you have to recognize the individual is at fault. You can't just hide behind "Oh that wasn't me, that was the company" or " That was Musk of SpaceX having an opinion of Musk of Tesla, they are different entities."
If someone is attempting to be genuine and truthful when it comes to personal statements, fine, we can consider the protections. But if someone is flagrant and malicious then those protections no longer apply.
At some point you have to recognize the individual is at fault
Sure, and you catch them on something else, like fraud. But if it's purely a financial failure, you bankrupt the corp and move on, because that's how the law is structured.
If we want different results, we need different legal structures. In this case, we shouldn't be granting liability protections in the first place if the person opening it has a history of bankruptcies or whatever. But once the liability protections are granted, they must be upheld or revoked, and if revoked, all prior actions should still be covered.
That's how the law should work, and we can't just waive away legal contracts because they're inconvenient, because that violates the rule of law.
Assuming I accept your premise, the premise of the article is that the actions are not being done by the company.
The key point is that Musk is at fault, not his company.
You can't just hide behind "the company" and do whatever you want.
At some point, as the EU is discussing, the individual is at fault.
It really depends on if Musk is acting as an officer of the company or on his own. If it's on his own, he's liable in the same way that any individual is liable, and only personal assets would be considered. If he's acting as an officer, then the company he's representing is liable.
At no point would other companies he runs be liable, unless he's also acting as an officer of those other orgs at the time. So they should never consider revenue from other firms, but merely revenue from his personal holdings.
That said, this is coming from a US perspective, I'm not familiar with EU law.
Yes that’s how it should be. But who determines if the person is doing it on purpose or if it’s a genuine mistake? There shouldn’t be ambiguity in the law, which is why you always either end up hurting corporations, or hurting citizens. Can’t please both with objective law.
But who determines
How about a governing body with systems of checks and balances? You're pretending that laws are just out there enforcing themselves. The EU isn't just some dude with a vendetta. It's a large collection of people making decisions.
And in fact as a business, in order to do business in the EU, you've agreed that the EU has the ability to make decisions like this.
I don't think I quite agree about governments being predatory by nature. I think they can be, have been in the past, and safeguards and checks and balances need to be there to prevent it. But generally a democratically elected government is beneficial, albeit flawed. Often reactive rather than proactive, but not commonly bloodthirsty. I mean, they often can't even jail executives for criminal decisions or negligence.
In Elon's case, I do believe governments around the world are going to have to adapt to protect their citizens from popular, but provably false and dangerous propaganda, as well as protect their privacy in the EU's case.
Also, I agree, we both aren't lawmakers. So for now I will just have to cheer any attempt at adaptation, and hope that their solution is functional and passes scrutiny.
I don't think I quite agree about governments being predatory by nature.
Well, if you look at the history you might change your mind. If you look at the Top 10 Most Politically Influential Countries, by US News, you will notice that out of the 10, at least half cannot be considered "beneficial".
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I hope we can agree that Russia (1) and China (3) are predatory. But in case you don't believe so:
- Russia: I guess you can look at the recent invasion of Ukraine, or the arrest of Navalny for "extremism", or the arrest of Maria Ponomarenko for speaking against the war in Ukraine.
- China: I shouldn't need to link anything, but at least I'll point to Chen Pinlin arrested for the crime of making a documentary.
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We have the UAE (9) and Saudi Arabia (7), who will literally kill you for the crime of being a journalist [SA], being gay [SA], and arrest you for speaking against them [UAE]
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Israel (5): I guess it depends on where you stand with the current Israel-Hamas situation. But I wouldn't say Israel has an utopian government.
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Iran (10): From numerous results from a quick Google search, I can point to Pakhshan Azizi being sentenced to death for her humanitarian work.
That's 6/10 of the most influential governments being provably predatory against their own citizens.
I mean, they often can’t even jail executives for criminal decisions or negligence.
That's one of the unfortunate advantages of creating companies, but I believe such protections are needed for the average citizen who wants to start their own business. Maybe you disagree.
In Elon’s case, I do believe governments around the world are going to have to adapt to protect their citizens from popular, but provably false and dangerous propaganda, as well as protect their privacy in the EU’s case.
If you must "protect" your citizens at all cost from misinformation being spread on X, then you can do what Brazil did, and just force all ISPs to block traffic to it, then fine thousands of dollars to those who get caught using a VPN to access it. This is also extremely predatory (against X and Brazil citizens), but nobody cared for some reason.
Also, I agree, we both aren’t lawmakers. So for now I will just have to cheer any attempt at adaptation, and hope that their solution is functional and passes scrutiny.
Hopefully it can be solved in a way that doesn't harm small businesses.
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isn't the one of the main purposes of creating an LLC or Corporation to shield your personal assets from the company's finances?
It is but it is not written in stone for all eternity. If people are abusing this law, like Musk, then it gets amended or rewritten.
I agree. They can try to change the laws, and if the majority of those with voting powers agree on a way to handle these cases while doing more good than harm, I’m sure few would complain.
Poor comprehension of the law. LLC in the vast majority of the western world means limited liability, not absolute immunity. Owners are 100% responsible for the actions of their companies, but their liability is limited when other members of the company act without their knowledge or in bad faith, or damages are unintentional. If the damage was intentional and the actions were sanctioned and approved by ownership or leadership they are absolutely liable for the legal repercussions. Liability is limited also for multiple owners, a hedge fund cannot be held responsible for the action of a company they only own 5% of and has an indirect influence on the actions of leadership. The really important element here is that Musk is being identified as acting as primary agent, not just Twitter, and using assets and resources from his other companies. Thus, it's not Twitter acting, it's Musk who is acting, and then fines can be on all of his capital holdings, not just Twitter. This nuance of law is exactly according to the laws in place in the EU.
But it can't be retroactive. If you change the nature of legal protection, that should only impact actions going forward. Ex post facto laws are illegal in the US, as they should be in any country where the rule of law is to be taken seriously.
LLCs shouldn't exist in the first place.
A companys owner should always be liable for the laws its company breaks.
I strongly disagree. That said, I think liability protection should reduce the larger your organization gets. A mom-and-pop restaurant shouldn't have their house get taken if their restaurant gets e-coli, but a CEO should go to jail for cutting safety spending to improve quarterly profits.
That said, if you have a legal agreement that certain assets are protected, you can't just waive it away because you don't like the trick they pulled. If the policy isn't meeting the original goals, the policy should be changed, and anyone who got away with a loophole should be protected by that legal mistake, otherwise we have a system of feels instead of laws.
I guess that’s your opinion.
Give it up. Lemmy thinks "corporation" means "megacorp", has no clue about financial dealings outside what they read in the headlines and can't spell "LLC".
"Capitalism BAD!", is what you should be posting.
Allowing limited liability companies to exist without requiring them to be covered by liability insurance is institutionalised market failure.
Absolutely and without question yes
Yes. Next question.
Why not? Which person owning multiple companies would be disadvantaged in a way that could be considered unfair in this way?
Shipping companies setup separate LLC's for their ships so of they have an accident the ship goes bankrupt and they keep their profits shielded.. that kind of stuff is bullshit
They also lose any claim to the cargo as well if they bankrupt the ship. It's the same idea as buying an umbrella insurance policy, if you suffer a major loss, you lose the asset, but you don't lose anything else.
But I agree, we should probably have tighter standards on what qualifies for liability protection, as well as a record of past abuse of liability protection to prevent future abuse (i.e. your LLC application would be denied if you've bankrupted too many prior companies). So we should be stopping this at the source, not retroactively removing the liability protections because the government made a stupid contract.
If the cargo is a few million barrels of oil now the problem of the government who's shores it threatens.. you don't really care do you?
That would be on the company's insurance to cover, and shipping companies should be absolutely required to carry insurance for things like oil spills.
Sure.. mostly they do.. but then captains are drunk, maintenance is poor and the insurance declines to pay.. or drags that out through court for 2 decades.. meanwhile governments have to foot the bill. The examples are endless unfortunately.
Yes. Like every system, there are those who abuse it. But you must be careful so that while trying to punish those abusers, you don't end up creating avenues to also punish those who don't abuse the system, but simply make a mistake. This sets a precedent so that the government can target the assets of the owner of the company if they're not satisfied the company punishment, which doesn't sound as cool when the company in question is your family's bakery or your neighbor's paralegal office.
I don't know if this will be a big issue for small businesses. But in any case where there is construction of multiple companies in a structure to separate profits and losses for fuckery with taxes and fines, I think I would also be OK with that whole structure being seen as one entity and treated as such.
The billionaire class however is uniquely adept at this kind of fuckery and wield an ungodly level of power, only surpassed by governments. And I think governments need to be careful that these assholes don't get too much power.. so it's high time they take them down a peg.. or 10.
It will be an issue because your average citizen won’t be so willing to start a new business if they know the government can come after their personal funds as a consequence of something that was done at the company level.
Who said personal funds. Are you arguing slippery slope or moving the goal posts?
You are going for the assets of the owner, which are unrelated to the company in question. Effectively devaluating companies that are not the infringing one, which directly affect the person’s net worth. This is no different than the government straight up taking money from your investments or 401K.
<...> your family's bakery or your neighbor's paralegal office.
Are not subject to DSA. For the most part DSA only covers companies which have more than 45 million users in the European Union.
Whether it’s subject to DSA or not is irrelevant. The fact is that a company has to pay a fine to the government, whatever the infraction might be, and the government is trying to force something else, not the company in question, to pay the fine.
It can't be irrelevant as it's the primary factor in deciding if the fine will even be brought. But ignoring that, there are clear limits. This would only apply to cases where corporate assets were used as personal ones. Hence, the limitation to private companies that have sole owners.
And you talk like this is some novel never heard of approach. Personal liability applies to many actions under the law, just corporations managed to lobby it down for themselves. And your scaremongering of small family business becoming some governments targets are unfounded.
It can't be irrelevant as it's the primary factor in deciding if the fine will even be brought.
Is DSA the only way for your company to get fined? If the answer is no, then yes, it’s irrelevant. Because while your company may not be eligible for a DSA fine, there are countless different situations which could leave you in the same spot.
Personal liability applies to many actions under the law
Yes, but none of those actions involve what is happening here. The DSA clearly states that the company may be fined up to 6% of its yearly revenue.
your scaremongering of small family business becoming some governments targets are unfounded.
What scaremongering? This is a valid concern. If Elon Musk’s rights as a company owner can be violated, who says yours can’t?
I love how you quoted all the parts expect the one that mentions where for this to even apply the person have to misuse corporate assets in the first place. Follow the law, and you are good in the EU, no matter which size business you are.
If Elon Musk’s rights as a company owner can be violated, who says yours can’t?
Here you go again. If they decide to go through with it, no Musk rights will be violated, there is extensive legal precedent in the EU that covers this.
I love how you quoted all the parts expect the one that mentions where for this to even apply the person have to misuse corporate assets in the first place.
Didn’t bother responding to it because it’s irrelevant. Elon Musk is not being accused of misusing corporate assets, he is being accused of not complying with the DSA.
there is extensive legal precedent in the EU that covers this
Of course, extensive means many. Point to at least 2 cases in which other assets of a company’s owner were threatened by the EU government due to DSA violations. I know there are none, so I’ll make it easier. Name 2 cases for which the EU went after the owner’s other assets because the fine to the company wasn’t enough, whatever the fine might originate from.
Shit take. Get judged by peers
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Fines are for punishment and further prevention.
Usually, fines are for the poor, but when it's a % of something, that's usually quite more significant.
Also, when you knowingly and willfully break the law, you're liable as a person, even if you're behind an LLC.