As the European Union home to many U.S. digital economy giants, such as Facebook Inc., Google Inc. and Apple Inc., Ireland plays an outsize data protection oversight role. Bloomberg BNA Privacy & Security Law Report Senior Legal Editor Donald G. Aplin posed a series of questions to Rob Corbet, partner and head of the Technology & Innovation practice at Arthur Cox in Dublin, about privacy and security issues in Ireland.
BLOOMBERG BNA: What is it about Ireland that makes U.S.-based tech and online giants like Facebook, Google and Apple—which recently announced that it would be spending $1 billion on a 1.7 million square foot data center near Athenry—want to locate their EU headquarters there?
Corbet: From a data perspective, we enjoy a positive reputation with U.S. companies who regard our data protection environment as a mature one in which regulators engage with companies to ensure meaningful compliance. Companies like Apple and Intel Corp. have been in Ireland for several decades, so there is also a fairly deep-rooted expertise within the Irish tech sector which pre-dates the decisions by Internet giants to locate in Ireland.
In addition, our competitive rate of corporation tax tends to draw most of the headlines, but I think it's important to say that many of the companies you mention have scaled their Irish presence for nontax reasons. For example, our U.S. clients speak very positively about the can-do nature of the Irish workforce and, as a country, we like to think we favor green lights over red tape. Ireland has been recognized by ''Forbes'' as one of the best countries in the world for ease of doing business, and we rank very highly internationally in terms of the availability of skilled labor, innovation and inward investment quality and value.
Although we remain enthusiastic members of the EU, the U.S. is our largest export trading partner so it's probably true to say that many Irish people feel closer to Boston than Berlin.
BLOOMBERG BNA: Do you think the Office of the Data Protection Commissioner of Ireland's privacy audit of Facebook Ireland in 2011 (11 PVLR 23, 1/2/12), and follow-up audit in 2012 (11 PVLR 1448, 9/24/12), established the standard for how the data protection author- ity makes use of its statutory authority in dealing with multinationals, and/or are there other powers at its disposal that you think are equally worth noting?
Corbet: The Facebook audits drew a lot of international attention to Ireland's data protection regime, and indeed, Facebook's data operations in Ireland remain the subject of much attention in the context of the current Court of Justice hearing around the integrity of the U.S.-EU Safe Harbor regime. The two audit reports provided a valuable insight into how in practical terms the Office of the Data Protection Commissioner was applying the EU Data Protection Directive principles in a rich data environment like Facebook.
However, I don't think it's fair to say that the Facebook audit established the ''standard'' as things are continually evolving. The initial audit report of Facebook dates back to 2011, which is an age in terms of the development of the digital economy. For example, since then we have seen the Snowden revelations, the socalled right to be forgotten decision, the European Court of Justice's declaration of invalidity of the Data Retention Directive and the appointment of a new data protection commissioner in Ireland. All of these developments directly impact companies like Facebook, so if another audit was to take place now one would expect there to be a different emphasis.
I should also say that contrary to some reports, the Office of the Data Protection Commissioner has extensive other powers under our domestic data protection legislation, including the power to ''dawn raid,'' to compel compliance using enforcement notices, to seek the destruction of data and to prosecute. The audit right is quite a powerful tool and one that does not exist in many other EU member states, which seem to equate enforcement solely with the ability to impose monetary fines.
BLOOMBERG BNA: Are there data protection compliance issues that mutinationals doing business in Ireland find the most challenging?
Corbet: I think the most frustrating aspect for U.S. clients is the lack of any genuine consistency or predictability across the EU marketplace in terms of how data protection rules are interpreted and applied. When the proposed EU data protection regulation (General Data Protection Regulation) was first published in January 2012, one of the big selling points was the ''one-stopshop'' mechanism, which was intended to reduce the unpredictability of operating across EU borders. Regrettably however, the negotiations around the regulation seem to be slowly driving towards a fudged version of the one stop shop , which seems unlikely to address the original concern.
On the positive side, multinational clients comment favorably on the Irish Office of the Data Protection Commissioner's willingness to pro-actively engage with them in relation to their privacy programs. This seems to distinguish Ireland from other EU markets, where relationships with data protection supervisory authorities seem to be predicated on a level of adversity.
BLOOMBERG BNA: How does Ireland's interesting sort of activist role before the ECJ on some of the larger data protection issues in the EU—from the group Digital Rights Ireland's successful challenge to the EU Data Retention Directive (2006/24/EC) (13 PVLR 660, 4/14/14) to the High Court of Ireland's decision to refer questions about the adequacy of privacy protections for data transfers under the U.S.-EU Safe Harbor Program (13 PVLR 1093, 6/23/14)—comport with the country's general business friendly reputation?
Corbet: The concept of ''business friendly'' should not be confused with any lack of awareness or concern about privacy issues. Irish people are highly concerned about their privacy, and our 1937 Constitution has provided for a right to privacy that pre-dates any data protection directives or indeed Ireland's transposition of the European Convention on Human Rights.
The concept of ''business friendly'' should not be confused with any lack of awareness or concern about privacy issues.
More generally, the Irish system provides a very wide level of access to justice. Civil liberties and other advocacy groups are active in Ireland, and there has been a marked increase in privacy-related litigation in recent years. For example, it is increasingly common for lawyers or individual lay litigants to argue data protection and privacy issues before the courts, and the likes of Digital Rights Ireland also play an important role in ensuring that the courts have the chance to opine on privacy issues. Under our common law system, the jurisprudence continues to grow both domestically and from the ECJ. For example, in the past couple of years the Irish courts have looked at data protection and privacy issues in all manner of contexts, from music piracy to bankruptcy proceedings to CCTV on public transport.
BLOOMBERG BNA: The Irish government gave qualified support to Microsoft Corp. in litigation now before U.S. Court of Appeals for the Second Circuit over whether the U.S. government can force Microsoft to turn over user e-mail data located on servers in Ireland (13 PVLR 2162, 12/22/14). What might the implications be for Ireland, and for multinationals doing business there, of an appeals court ruling against Microsoft?
Corbet: The Microsoft warrant case is hugely significant as it goes to the heart of national sovereignty.
The truth is that the U.S. government has an existing mechanism for reaching into foreign servers in the context of criminal investigations. The Mutual Legal Assistance Treaty (MLAT) offers an internationally recognized process to allow U.S. authorities to seek the assistance of the Irish authorities in obtaining evidence located in Ireland, which is required for the purposes of U.S. law enforcement.
It does not sit well with Irish corporations, Irish lawyers or Irish citizens that the U.S. government might seek to ignore the MLAT process in favor of its own domestic warrant processes. I don't think anyone would argue that the U.S. courts and U.S. government would comply with a domestic Irish court order if the roles were reversed?
BLOOMBERG BNA: Before Billy Hawkes left as head of Ireland's data protection commission, he said Ireland was ready to take a leadership role in carrying out the proposed data protection regulation to replace the 20- year-old EU Data Protection Directive (95/46/EC), but not in terms of meting out large fines as a matter of course (13 PVLR 187, 1/27/14). How do you think Ireland is viewed within the EU in matters related to the data privacy regime reform effort and as a data protection regulator?
Corbet: On a professional level I find it deeply frustrating that much of the negative commentary about Ireland's approach to the data protection regulation goes unchallenged. As I mentioned earlier, equating monetary fines with a positive compliance culture makes no sense. Many fines are dished out by EU supervisory authorities with little prior consultation or engagement, and I sometimes wonder if there must be a prize at the Article 29 Working Party meetings for the supervisory authority that gets the most headlines for issuing fines.
The reality of the approach in Ireland is that it is more focused on effecting real compliance by engaging with the companies, initially through proactive discussion and, where necessary, using the amicable resolution process to resolving complaints as set out in our legislation. We are not big on bureaucracy, but if amicable resolution is not possible, the Office of the Data Protection Commissioner is not slow to escalate through the hierarchy of enforcement powers set out in our acts.
The new Irish Data Protection Commissioner, Helen Dixon, has also been promised considerable additional resources to improve the technical competence of her office in dealing with emerging technologies. That reflects a broader governmental attitude that the regulation of the digital economy first requires an understanding of it. It also reflects the growing pull on the resources of that office, which is a consequence of Ireland's success in attracting foreign direct investment in the technology sector. Our U.S. clients have no fear of the Office of the Data Protection Commissioner being provided with additional resources. Their bigger fear is the current unpredictability and inconsistency in the EU's regulatory regime.
BLOOMBERG BNA: Is it too early to assess whether Dixon, who has been in her position for just over six months now (13 PVLR 1612, 9/15/14), is continuing the general approach to enforcement of her predecessor Hawkes?
Corbet: It is immediately clear that Dixon is intent on bringing her own unique style and new priorities to the office. While Hawkes was admired for his diplomacy and his unfailing positivity, Dixon appears to be on a mission to modernize the office of the Office of the Data Protection Commissioner so as to ensure that Ireland offers a best-in-class regulatory regime for data subjects and the companies that serve them. Dixon also seems anxious to increase Ireland's role at the Article 29 subcommittees so as to ensure we have influence in key decisions and opinions that emerge from that forum.
She has undoubtedly mastered her brief in short order, and already she has established a reputation as someone of very high intellect with striking clarity of thought. She speaks regularly at public events where she does not shirk difficult issues (including around enforcement), while the feedback from companies and privacy practitioners who have interacted with her to date has been exceptionally positive. Her first annual report will issue in May, and that will give us a firmer indication of how her general approach might differ from that which has gone before.
Previously published in Privacy & Security Law Report, 14 PVLR 588 (Apr. 6, 2015). Copyright 2015 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.