Oligarchy

HAVENS ARE ABOUT MORE THAN TAX

Last week, I talked about tax havens, and how they appear spontaneously; in a similar way to how my dog appears spontaneously whenever I sit down to eat. Thinking about it though, I wish there was a term for these places other than “tax haven,” because they are about so much more than tax. The Tax Justice Network calls them “secrecy jurisdictions,” which is good, but that doesn’t go far enough either.

The most successful havens provide all the services that the rich and powerful want, whether that’s shielding them from scrutiny, selling them fine art, helping them evade justice, and more. And in that context, I am fascinated by a legal challenge being brought by Irish Council for Civil Liberties, which reveals a hidden side to Ireland’s highly successful career as a haven for giant U.S. companies looking for a comfortable base in the European Union. Dublin has previously fought off attempts by the European Commission to make it impose higher tax bills on Apple and other large tech companies, but now it appears to be using rather sneakier techniques to stop them having to obey EU rules.

The EU has sought to provide the world’s strongest regulation on tech companies, with its flagship General Data Protection Regulation designed to give individuals control over their own data. The bloc might not have created many tech giants, but at least it could make sure consumers wouldn’t be harmed by anyone else’s. Or at least that was the theory.

There is a flaw, however, which is that enforcement of the GDPR depends on national level regulators. And that means its fate is in the hands of an Irish government that has built an entire generations-long development model on giving U.S. corporations and the tech oligarchs exactly what they want, and resisting pressure from foreigners to make them hand over a penny.

• “There’s also that conflict of interest factor, that Ireland benefits a lot from having those tech companies there, and I think it puts them under unfair pressure to have to hold those things in tension,” Frances Haugen, who exposed Facebook’s practices to public scrutiny earlier this year, told members of the European parliament. “Because I’m sure Ireland cares about the safety of our children, Ireland cares about our democracies being threatened, but they also have extreme pressures being exerted against them.”

Some of the practices used by tech giants in the European Union are troubling, including this analysis of Google by Norway’s Consumer Council, which suggests it was deceiving consumers into agreeing to being tracked. (Google has said it has updated its approach.) French regulators fined Google 50 million euros, but Ireland has shown much less urgency.

And this is not the only example. Europeans began to notice that complaints brought against tech companies were taking much longer to investigate in Ireland than in other member states, and this is what the IPPR set out to investigate. What it found was worrying, not least because Ireland oversees regulating compliance by Google, Facebook, Apple and Microsoft, all of which have major offices in the country, and that is pretty much everyone that matters.

• “The Irish Data Protection Commission is the bottleneck of GDPR enforcement against Big Tech across the EU. Almost all (98%) major GDPR cases referred to Ireland remain unresolved,” a report by the group concluded. “No other GDPR enforcer in the EU can intervene if the Irish DPC asserts its lead role in cases against big tech firms headquartered in Ireland. As a result, EU GDPR enforcement against Big Tech is paralyzed by Ireland’s failure to deliver draft decisions on cross-border cases.”

The group has written to the European Commission complaining about its failure to demand action from the Irish regulators.

• “The fanfare surrounding the GDPR was such that the EU’s global influence will wane if it is allowed to fail. Consumers will suffer too, because innovative start-ups and venerable news publishers will be unable to compete because of Big Tech’s entrenched internal data free-for-alls. The worst cost will be that continuing data misuse will tyrannize citizens, and debase politics,” the letter says.

It will be fascinating to see the outcome. Haugen is arguing for the EU to have a single central regulator, which she said would help to prevent the kind of issues that she exposed at Facebook (or whatever it’s calling itself these days).

• “I think there’s a real, real need for there to be some kind of centralized authority in Europe,” she said. “If there’s only maybe 200 or 300 people in the industry who have enough experience and insights around how these systems work and what the consequences of them are, if we expect to spread them across 27 agencies, I think it’s going to be very ineffective.”

This of course pre-supposes that EU member states want their regulators to be effective, or that they would be prepared to share their right to tax and regulate companies with their fellows even if they did. The EU also has its hands full with challenges to other aspects of its supposedly shared values, not least from Poland and Hungary. However, it’s hard to see how the EU can continue to hold itself up as an exemplar of tech regulation if it allows a member state to willfully refuse to enforce the regulations the union as a whole has agreed.

In the meantime, however, it’s euros-in for the tech companies.

SUMMIT FOR DEMOCRACY? SHMUMMIT FOR SHMEMOCRACY!

So, Russia and China are totally fine with having not been invited to Joe Biden’s online Summit (Zoomit?) For Democracy next month, as they explained in a joint article last week, because nothing says “we don’t care” better than a 1,000-word rant written in that kind of weird mangled English autocracies used before the world got Google Translate.

• “This trend contradicts the development of the modern world. It is impossible to prevent the shaping of a global polycentric architecture but could strain the objective process,” the two countries’ ambassadors informed readers of The National Interest, a conservative magazine published by a think tank founded by that noted believer in due process, President Richard Nixon.

Both countries make a strong defense of their democratic-ness, though I personally would have found China’s insistence that its “eight non-Communist parties” proved the plurality of its set-up more convincing if it had just said it has nine political parties. Similarly, Russia’s claim that a referendum last year strengthened its “democratic institutions” only makes sense if you weren’t aware that it rubberstamped Vladimir Putin’s desire to be president until 2036.

• “There is no need to worry about democracy in Russia and China. Certain foreign governments better think about themselves and what is going on in their homes. Is it freedom when various rallies in their countries are dispersed with rubber bullets and tear gas? It does not look very much like freedom.”

I apologize for the extended quotes. I am a connoisseur of this kind of nonsense, and this is a vintage example. The article wound up with some forceful points about how modern history shows that you can’t export democracy militarily, which would have been more relevant if that was what the White House was doing, rather than convening the leaders of several dozen friendly countries for a chat. Some 109 countries are invited, plus the European Union, which likes to pretend to be a country at times like this, plus Taiwan.

• “Civil society groups have documented 15 consecutive years of global decline in democracy.  This, of course, presents huge challenges to global stability and prosperity that can only be solved collectively, with likeminded democracies coming together to reverse this decline,” said U.S. Under Secretary of State for Civilian Security, Democracy, and Human Rights Uzra Zeya, last month.

Inevitably, journalists started trying to parse the invitation list, to figure out the criteria by which countries had been considered democratic. It is undeniably a little hard. Poland got invited, but Hungary didn’t. Iraq got invited, but Turkey didn’t. Angola got invited, but Mozambique didn’t. Anyway, the brave folks at the Carnegie Institute have tried to impose some logic on it, which concludes that Iraq probably only got invited to prevent Israel being the only Middle Eastern attendee; while Pakistan’s attendance is more about keeping it on team anti-China than anything else. As for Angola, no one appears entirely sure what’s going on there.

• “Biden’s team intends for the December summit to be merely the first step in what administration officials are billing as a “year of action.” The real make-or-break moments will occur in the months ahead and revolve around a simple question: can the summit galvanize real reform commitments and reverse fifteen years of democratic decline?” the report’s authors asked.

Anders Aslund has written an interest analysis of previous attempts to do what the summit supposedly aims to do, and it’s not very hopeful.

BELARUS FREE THEATRE

If you don’t know the Belarus Free Theatre, you’re in for a treat. They are the inheritors of the legacy of the kind of brave, creative, innovative voices that opposed communism in Eastern Europe during the Cold War. Sadly, because of the difficulties of working in Belarus, their directors are based in London, but they have maintained performances and rehearsals at home as much as possible.

If you are in London on December 10, they are part of the panel discussing the documentary Alone, which will be given a U.K. premiere at the Barbican. Go along.

WHAT I’M READING

I am lucky enough to be from the Welsh town of Hay-on-Wye, which is home to the world’s finest books and ideas festival. We have just had the Winter Weekend, which is like a smaller (and colder) version of the summer gathering, and it was awesome to be in a big tent with lots of people once more. I really enjoyed seeing the historian Dan Jones talking about his new book, which compressed the entire millennium between the fall of Rome and the reformation in a single volume.

So, I’m reading that, and I’ve got quite a long way to go, but it’s very enjoyable so far.