Reading08: Corporate Personhood
Put simply, corporate personhood is the concept that corporations should be afforded the same rights as individuals. Importantly, this does not just mean that the individuals that own/make up a corporation should receive their individual rights when performing corporate activities; it means that the corporations themselves receive these rights as an entity separate from the humans associated with it. This is an extremely powerful concept with far reaching implications. Legally, at least as applied in the United States, corporate personhood means that corporations receive most, but not all, of the constitutional rights that individuals receive. For instance, corporations are generally protected by the fourteenth and first (especially following the Citizens United decision) amendments but not by the fifth amendment. The most important legal ramification of corporate personhood is that it allows corporations to enter contracts and be sued/prosecuted – thus holding these collectives accountable for its agreements and actions.
However, the fact that corporations are not actually persons makes punishing them for wrongdoings somewhat strange. You cannot jail an entity like you can a person, and even if you fine a corporation, the individuals within it will most likely be fine themselves. Thus, it can be argued that because corporations cannot be punished in the same way as individuals, they should not receive the same rights. I do not agree with this logic because though it is correct that corporations cannot be jailed, they can be severely fined and even broken up and thus have strong legal incentives to not break the law (not to mention the desire to avoid a crippling public backlash). Therefore, I believe that as long as strong enough laws are in place to limit corporate abuses and these laws are actually enforced, corporate personhood should persist.
One interesting case study of corporate citizenship was the recent EU Google antitrust fine. In July of 2018, Google was hit by a record $5 billion fine for allegedly abusing its Android market dominance in three key areas (according to The Verge): – “Google has been bundling its search engine and Chrome apps into the operating system. Google has also blocked phone makers from creating devices that run forked versions of Android, and it made payments to certain large manufacturers and mobile network operators to exclusively bundle the Google search app on handsets.” I have mixed feelings about this fine. On one hand, I am a strong supporter of antitrust legislation as I believe it is essential for ensuring markets remain competitive, and I think that competitive markets are the best way to protect consumers from corporate abuses. I think that the second and third charges against Google probably do represent anticompetitive behavior, especially blocking phone makers from making devices running forked versions of Android. However, I do not think that there is anything wrong with a software company bundling one of its products into another one of its products. To be completely honest, when I first heard about these fines over the summer I was quite enraged. This seems like normal corporate activity, and I cannot see any reason why a company should not be allowed to do so.
Finally, I would like to address the question of whether corporations should be expected to have the same ethical and moral obligations as persons given that they receive most of the same rights. While I would love to say that I think corporations should live up to a certain moral or ethical standard, defining this standard is extremely subjective. When speaking of personal ethics, most people would say that not everything that is legal is also moral, and I think the same applies to corporations. So no, I do not think that corporations should have to live up to a certain ethical standard – we should let the free market decide if a corporation is being unethical and punish those that are not. The only standard that corporations should be forced to follow is the legal standard – just like individuals.