Where do the millions of euros in fines imposed by regulators on companies go?
Their value is several million euros. In recent days, financial authorities have imposed several large fines on companies that do not comply with European and national regulations. On January 4, France’s National Commission for Computation and Liberties (CNIL) thereby fined Apple 8 million euros for violating the rules on the protection of personal data (RGPD) and one of 5 million euros for the videos. On January 12, as announced by the French personal data police, the sharing app Tiktok for not allowing its website users to simply opt out of cookies. Earlier, on December 23, he announced that he had imposed a record fine on Microsoft. The latter had to pay 60 million euros for not making it simple enough for users of the Bing search engine to refuse cookies. On December 30, the Autorité des marchés Financiers (AMF) fined the management company H2O AM a record €75 million for “ie. multiple violations of professional obligations “.
These sanctions are not only within the jurisdiction of French institutions. On November 28, the Data Protection Commission (DPC), the Irish regulator on behalf of the European Union, fined Facebook’s parent company Meta €265 million for failing to adequately protect its users’ data.
So where does the money for these heavy penalties go?
Fines from French regulators
As for the fines imposed on companies by French regulatory and supervisory bodies, the money they collect is sent to the state coffers. So ” the payment check is sent to the relevant authority (through the fine) that pays the fine directly to the Ministry of Economy and Finance. “, explains the CNIL. The same applies to sanctions issued by the Prudential Regulation and Supervision Authority and the Competition Authority. However, financial institutions bring a nuance. The Autorité des marchés Financiers actually notes that ” the monetary and financial code specifically stipulates that fines imposed on management companies and their managers shall be paid to the guarantee fund to which the management company is subject or, in its absence, to the State Treasury. “.
The money from these fines paid by companies that break French rules is received by Bercy. So, in 2021, the Ministry of Economy and Finance received 196 million euros from the regulatory authorities in 2021. For comparison, this is 3.5 times less than the money collected thanks to traffic radars, which the Court of Auditors estimated at 655 million in 2021.
These amounts are then included in the current year’s budget “product of fines announced by other independent administrative bodies”. This mechanism allows that regulatory agencies are not interested in announcing sanctions, Finance Watch NGO Chief Economist Thierry Philipponnat explains. VSa avoids conflict of interest. To whom In the United States, the reverse is not the same principle. Sanctions are assigned to projects or institutions. There is a bounty hunter aspect to the American system that is generally absent and unhealthy in France. “.
Sanctions system at the European level
France, and the states in general, do not impose only fines. The European Commission is also being urged to impose sanctions, including €4.1 billion against Google in 2018 for not respecting competition with its Android operating system. Thus, in 2021, the Commission received 2.1 billion euros. This amount was sent directly to the general budget of the European Union. This budget, managed jointly by the Commission and the European Parliament, was used in particular to finance the “Next Generation EU” European recovery plan, which allows member states to distribute €750 billion in EU aid. But it also finances scientific research or construction projects, such as the financing of the sand cleanup of Mont-Saint-Michel between 2005 and 2015.
The European Central Bank, in turn, can impose financial sanctions against large banks that violate European Union laws. On December 16, 2022, the ECB fined Spanish bank Abanca €3.14 million for failing to report a cyber attack. In total, the “administrative penalties” imposed by the guardian of the euro amounted to one million euros in 2021. We reserve a portion of these collected fines and donate a portion of them to national central banks such as the Banque de France. They themselves are forced to return part of these amounts to the State Treasury. “, the institution explains.
