If you sell 10,000 pieces of 15 dollar items for 20 dollars, your turnover is 200,000 dollars but your profit is 50,000 dollars because the cost of your investment was 1 50,000 dollars.
4% of the turnover would be 8000, which is suddenly 16% of your profits in this case. Oops.
Then you have to take into account that this is your global turnover. Your one branch in Germany made a mistake and suddenly the whole worldwide company has to pay.
Microsofts turnover last year was a 100B roughly. That could end up being a 4 billion dollar fine. 20 million dollars is peanuts compared to what it could be in the worst case. Hundreds of companies could take a 20m fine and not go bankrupt but a 4% global turnover fine will kill almost any company.
If you sell 10,000 pieces of 15 dollar items for 20 dollars, your turnover is 200,000 dollars but your profit is 50,000 dollars because the cost of your investment was 1 50,000 dollars.
4% of the turnover would be 8000, which is suddenly 16% of your profits in this case. Oops.
Then you have to take into account that this is your global turnover. Your one branch in Germany made a mistake and suddenly the whole worldwide company has to pay.
Microsofts turnover last year was a 100B roughly. That could end up being a 4 billion dollar fine. 20 million dollars is peanuts compared to what it could be in the worst case. Hundreds of companies could take a 20m fine and not go bankrupt but a 4% global turnover fine will kill almost any company.