They refused to respond to an Australian government investigation. (Because Elon fired the two people who interfaced with Australia.)
The fine is not directly because they haven't cracked down*, but because they couldn't competently answer if they're handling it at all.
(* and they've probably fired enough trust and safety people that they're also having trouble there, but that's not exactly what the fine is for.)
It's both. Even terrible people with something to lose are less likely to throw it all away.
If this guy makes $35k a year at dollar general, he probably doesn't go on a murder spree.
But you could also just not be an asshole. Why go after random people instead of someone who actually helps cause the bullshit?