Google just proved its $5 billion fine was too small

Is that all?

Googles profits are piling up and it owes more in fines.
(Image credit: Illustrated | iStock/rvolkan, urfinguss)

Last week, the European Union slapped Google and its corporate parent, Alphabet, with the biggest single fine ever levied on a company — a cool $5.1 billion. Then on Monday, Alphabet announced it was raking in second quarter profits of $3.2 billion despite the fine. The company's stock leapt on the news.

Regulatory fines are all about incentives. Sure they can theoretically be too large. But if they're too small, the company won't feel any actual need to change its behavior. One research analyst compared Google's EU fine to "a delivery company having to pay for a parking ticket."

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Jeff Spross

Jeff Spross was the economics and business correspondent at TheWeek.com. He was previously a reporter at ThinkProgress.