I’m Alan Chapell. Over the past 20+ years, I’ve been outside privacy counsel to hundreds of digital media companies and write a monthly syndicated report called The Chapell Regulatory Insider. I’m also a regulatory analyst for The Monopoly Report.

The latest Monopoly Report podcast! This week, I welcome antitrust litigator Brendan Benedict. We discuss the civil antitrust lawsuits being filed against Google by publishers and adtech companies.

Our Story Begins Nearly 15 Years Ago

It was the summer of 2012. I was enjoying my August days working out at the East Deck in Montauk when I heard the news that Google had agreed to pay a whopping $22.5 million to the Federal Trade Commission (FTC) to settle charges that it bypassed privacy settings in Apple's Safari browser.

I don’t want to focus on what Google did or didn’t do here. Rather, let’s focus on the fine. At the time, the size of fine was considered huge, perhaps bordering on insane. No doubt, the folks at the FTC were high-fiving each other that day. Surely, this fine would send a message to the business community that privacy was not for sale, and the FTC was not to be trifled with.

No disrespect intended to the FTC, but when I read through the settlement, a few questions came to mind:

Why would Google be so willing to hand over that kind of money? After all, the folks at Google swore up and down that it was all a horrible mistake by a well-meaning (albeit rogue) employee.

The answer to that question comes in three parts:

1. The settlement didn’t require Google to admit wrongdoing.

2. The settlement didn’t place meaningful limits on Google’s future practices.

3. While a big number to you and me, the fine was a rounding error for Google.

In other words, the fine allowed the FTC to claim victory, but it probably did little to improve privacy practices in the marketplace. More importantly, that moment can be viewed as the beginning of a larger trend, one in which fine inflation increased significantly over the next few years.

Rather than leading to “better” practices, fine inflation has led big tech to engage in a math exercise. It’s a math exercise that I refer to as the “Regulatory ROI.”

What Is a Regulatory ROI?

If you’ve been in the ads space for a while, you (and/or your executive team) probably played a version of the Regulatory ROI game at some point. Getting into compliance costs money, and money is both finite and can be “better” invested in things that drive revenue. So companies will sometimes under-invest in compliance in hopes of getting out of the ads casino via an exit before a regulator comes calling. I’ve gone on record that this approach is becoming significantly more thorny for startups in the ads space.

But if you’re really big, and flush with cash, the math behind the Regulatory ROI is an entirely different animal.

When Lawmakers and Regulators Doubled Down on Fines

It wasn’t just the FTC issuing big fines. Just a few years later, the European Union created a groundbreaking fine structure via the GDPR: the higher of €20 million or 4% of global annual turnover for serious breaches. And there have been a number of noteworthy fines. Forgive me if I missed some, but they include:

• Meta - €1.2 billion (2023)

• Amazon - €746 million (2021)

• TikTok - €530 million (2025):

• Meta (Instagram) - €405 million (2022)

• Uber: €290 million (2024)

• H&M: €35 million (2020)

And later, via the Digital Markets Act, the EU doubled down again, imposing fines of up to 20% of global turnover!

Not to be outdone, Texas recently imposed fines against Google ($1.375 billion) and Meta ($1.4 billion). But you’ll note that in both of those cases, the companies didn’t have to admit to wrongdoing, and the non-monetary penalties were milquetoast at best.

What About Apple ATT?

I think my favorite example of Regulatory ROI was the Apple ATT saga. Competition authorities across Europe have coordinated enforcements and concluded that ATT creates artificial barriers for third-party developers while benefiting Apple's advertising business. As the below chart demonstrates, the cumulative fines ($278 million) remain modest compared to Apple's ad global revenue growth since ATT launched ($16 billion), suggesting that financial penalties alone won't compel meaningful change. In fact, with a Regulatory ROI that high, one could argue that Apple would be foolish not to have created and perpetuated ATT.

The Curious Case of Google Shopping

In 2017, the European Commission fined Google €2.42 billion for abusing its market dominance by favoring its own comparison shopping service. Google appealed the decision, but the fine was upheld by the EU Court of Justice in September 2024.

Who wants to bet that the revenues for Google Shopping just during the seven-year period of the appeal process was a multiple of the €2.42 billion fine? That’s a great Regulatory ROI.

Here’s My Question

Certainly, high fine structures grab headlines. But 10-15 years in, are the fines really impacting practices?

I have my doubts.

Perhaps you’re thinking that the math changes if the EU fines some gatekeeper 20% of worldwide turnover. But honestly, what do you think the odds are of the EU Commission actually collecting on that type of fine from a U.S. tech giant given all the geopolitical implications?

The Issue Isn’t Money. It’s Power.

Here’s how I’m thinking about large fines:

• If the fine structure isn’t punitive,

• If getting caught just means that your most prudent course of action is to extend the offending behavior to the point where the fine is a fraction of the revenue earned, and

• If regulators can’t even use the fines as leverage to change practices in a meaningful way…

How in the world can one argue that these fines are effective?

EVENTS

Marketecture Live III

New speakers just added
Ready or Not: AI Is Changing Advertising

How Agencies Are Adapting to the AI Meteorite 
Bob Lord, Horizon Media & Obele (Brown-West) Hinsley, Colle McVoy

Consumer Protection in the AI Era 
Mark Meador, Federal Trade Commission & Alan Chapell, The Monopoly Report

If there’s an area that you want to see covered on these pages, if you agree/disagree with something I’ve written, if you want to tell me you dig my music, or if you just want to yell at me, please reach out to me on LinkedIn or in the comments below.