Written by 10:02 pm EU Investment

Ireland plans to sue EU in growing feud on tech regulation

A long-simmering row between Ireland and the European Union over the regulation of Big Tech has just boiled over amid allegations that the Irish authorities have been giving an easy ride to the giant tech companies based in their territory. 

The European Data Protection Board in Brussels, which oversees the Irish Data Protection Commission, has criticized the DPC and urged it to deepen its investigation into the alleged misuse of personal data by Meta, the parent company of Facebook, Instagram and WhatsApp. The DPC has responded by saying it will sue the EDPB for “overreaching” its authority.

This is just the latest in a long series of battles between the EU and Big Tech over issues like competition, taxation and privacy, with Ireland — as the largest hub for Big Tech companies in the EU — taking most of the flak.

“We have a very long and ongoing problem with Ireland,” said Max Schrems, an Austrian lawyer and data protection activist who co-founded the privacy campaign group NOYB, which stands for None of Your Business. “Ireland is one of the tax-avoiding safe havens for big companies in Europe, and that includes regulatory matters.”

Ireland has the primary responsibility for regulating tech across the EU when it comes to data protection. Schrems alleges that Ireland has failed to do its job, through fear of upsetting Big Tech.

“They got just very dependent on these companies, and it makes it really complicated to enforce fundamental rights in Europe any more,” he said.

Johnny Ryan of the Irish Council for Civil Liberties is also highly critical of Ireland’s regulatory efforts.

“The object of Europe’s landmark law — the GDPR [General Data Protection Regulation]— was to finally stop the data free-for-all within and between these companies, and that law put the onus on Ireland’s authority — the DPC — to police it,” Ryan said. “But in my view, it’s the DPC that is paralyzing Europe’s enforcement against Big Tech. It’s isolated in Europe. There’s clearly a problem at the commission.”

The commission turned down Marketplace’s request for an interview on the grounds that these issues “are before the courts or soon to before the courts.” The Irish government has also refused to comment. And so has IDA Ireland, the agency that’s been responsible for attracting foreign direct investment, as well as the main business organization for the sector, Technology Ireland. This is clearly a sensitive issue. 

But on the other side of the Irish Sea in London, Matthew Lesh of the free market Institute of Economic Affairs was prepared to weigh in on this subject. He argued that the Irish authorities are right to do everything to defend what is a vital industry.

“More than 100,000 people are employed in the technology sector in Ireland,” he pointed out. “It contributes about 16% of Ireland’s economy.”

Lesh is critical of what he calls the EU’s heavy-handed approach to Big Tech.

“The targeting of technology companies for heavy enforcement, throwing large fines — that’s the kind of behavior that scares away investment, discourages innovation and ultimately undermines economic growth.”

The influx of major, mostly American tech companies over the past three decades has certainly fueled Ireland’s economic growth and helped transform the country into one of the most prosperous in Europe. But privacy activist Max Schrems claimed that Ireland’s EU membership has also been vital to that growth, and the law is the law whether it inconveniences important companies or not.

“Ireland is extremely dependent on these industries, but, after all, you can’t just not apply the laws that exist in the European Union,” he said.

Jim Stewart, professor of finance at Trinity Business School in Dublin, a long-term critic of Ireland’s use of low corporate taxes to attract large foreign corporations, believes that the country may be damaging its membership in the European Union with its standoff over data protection.

“It’s very dangerous for us to dismiss EU regulatory and tax concerns, especially when we are going to the European Commission and saying, ‘Please help us with the fallout over Brexit,’” he said. “It’s very much in Ireland’s interests that we have a strong European Union with all the member states cooperating.”

Stewart doesn’t accept that more rigorous enforcement of EU regulations would trigger an exodus of large tech companies from Ireland. He believes that if there are any job losses from those companies in the months ahead, it will more likely be due to the labor shakeout already underway in the global tech industry.

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