On most issues, the surging US presidential candidate Elizabeth Warren’s catchphrase is that she has “a plan for that”. Her centrepiece business policies would define the epoch for certain companies located here. As she strides to the front of the Democrat field, what is Ireland’s plan for Warren?
Leaked audio this week from an internal Facebook meeting included a promise by its chief executive Mark Zuckerberg to fight Warren's anti-monopoly plans to "break up Big Tech" should she reach the White House. She has specifically threatened to go after Facebook, Google and Amazon, which all have major operations in Dublin.
“If she gets elected president, then I would bet that we will have a legal challenge, and I would bet that we will win the legal challenge,” Zuckerberg said, in the comments leaked to theverge.com. “If someone’s going to try to threaten something that existential, you go to the mat and you fight.”
Fight
With an officially-claimed 15,000 Irish jobs at the three companies combined, the Government would feel it had a dog in that fight. Which dog, is the question.
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Here is Ireland’s Warren quandary: Big Tech might be a big employer here, but she is completely correct about the need to rein in Facebook, Google and Amazon. With a combined market cap of $2.1 trillion (€1.9 trillion) they are too big and powerful to adequately regulate. It is an economic and social imperative that they be broken up, even though that could damage their ability to invest in Ireland.
If it’s not Warren, it will be somebody else eventually. If US or EU sheriffs come to bust up Big Tech, Ireland, as their international home (in the case of Facebook and Google) and regulatory safe harbour, must decide – play along or play the fool? The State’s international reputation was sullied for being on the wrong side of history over corporate tax avoidance. Ireland cannot afford to be the bad guy yet again, if this State appeared to back anything other than the international greater good.
Warren’s thesis on Big Tech is straightforward. She argues that Google, Facebook and Amazon, by dint of their scale and ability to kill off competitors, as well as their vast troves of data, have too much power over economies, societies, and democracies.
“They’ve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else,” she wrote in March. Outside of Mountainview, Menlo Park and Seattle, and perhaps Silicon Docks in Dublin, who could argue against her while keeping a straight face?
Warren cites an eMarketer claim that Amazon was on course for 50 per cent of the US e-commerce market by the end of 2018, eight times the share of its nearest rival, eBay. Meanwhile, Facebook's terrifying power is illustrated in the blame it gets for facilitating bad actors to influence elections, such is its omnipresence. As for Google, when is the last time you even contemplated using another search engine? The rest are pygmies and will remain so, which makes Google competitively immovable.
Financial interests
“As these companies have grown larger and more powerful, they have used their resources and control over the way we use the internet to squash small businesses and innovation, and substitute their own financial interests for the broader interests [of society],” Warren argues, with some justification.
She says Big Tech companies have used mergers to limit competition, such as Facebook's purchases of Instagram and WhatsApp. She also accuses them of a conflict of interest by controlling "proprietary marketplaces" or trading platforms, such as Amazon Marketplace, while at the same time participating in the platforms as sellers against other competitors.
Firstly, Warren proposes passing laws to designate major tech companies with trading marketplaces as “platform utilities”. They would be forced to hive off their own trading arms from the platforms, to ensure their own businesses didn’t get favourable treatment. She’d also ban them from sharing data with each other.
"Amazon Marketplace, Google's ad exchange, and Google Search would be platform utilities under this law. Therefore, Amazon Marketplace and Basics, and Google's ad exchange and businesses on the exchange would be split apart. Google Search would have to be spun off as well," she says.
Secondly, she says she would appoint regulators to unwind Facebook's purchases of Instagram and WhatsApp; Google's buyouts of Waze, Next and DoubleClick; and Amazon's deals for Whole Foods and Zappos.
“Unwinding these mergers will promote healthy competition in the market, which will put pressure on big tech companies to be more responsive to user concerns, including about privacy,” she argues. Imagine Facebook and Instagram as competitors trying to outdo each other to protect their users’ data?
If Warren topples Trump and takes the White House, it would present a genuine dilemma for Ireland, were she to follow through with her plans.
The Government has made a strategic choice to cuddle up to Google and Facebook, in particular. One has only to read the cringe-worthy exchanges of mutual fawning between Leo Varadkar and Zuckerberg, released recently under Freedom of Information.
Yet it’s easy to say he should have given Zuckerberg hell for the negative attention Facebook has brought on Ireland for its exotic tax practices and its management of user data. But he can’t just tell such a large employer to take a hike. Arguably, given Facebook’s level of investment, the Taoiseach was merely acting in the immediate national interest. So long as he doesn’t forget Ireland’s long-term interests.
Whatever about Amazon, if Google and Facebook are broken up, the landscape will change on Silicon Docks.
FOOTNOTE
– The announcement of the impending elevation of little-known Corkman Ken Murphy to the top job at Tesco, as group chief executive, had many in the City of London's Square Mile scratching their heads.
When he takes over next summer, he will have big shoes to fill as the replacement for "Drastic" Dave Lewis, whom one analyst said on Wednesday will be forever known as the "bloke who saved Tesco" from obliteration by the grocery discounters.
They know Murphy well at Munster rugby club, however. When the club put together a commercial advisory board of big hitters in the dog days of 2012, the former Walgreens Boots Alliance chief commercial officer was one of those to whom it turned. Until he moved to the US four years ago, Murphy served alongside prominent names such as Digicel's Leslie Buckley and Greencore's Patrick Coveney.
Munster's commercial board is chaired by the business blue-blood Niall FitzGerald, the former chairman and chief executive of Unilever, a rival of Procter & Gamble where Murphy started his career in consumer goods.
Boots, where Murphy soldiered for most of his career, would have been a client of Greencore’s sandwich supply business. By all accounts, it was Greencore’s Coveney and FitzGerald who identified the Corkman to come on board at Munster. Murphy was also seemingly a handy rugby player in his day, and played for Munster at underage level.
His former Munster colleagues were impressed and say Murphy brought innovative ideas to the table. He is said to have been especially influential in pushing Munster to seek commercial tie-ups with educational institutions.
When US giant Walgreens took full control of Boots Alliance in 2015, Murphy, who had been based in Nottingham, moved to Chicago for a senior role and left the Munster commercial board. He didn’t cut his links with the club entirely, however, and has been spotted about the place for big games.
He quit his US job last December and moved his family back across the Atlantic, although he kept a consultancy role at Walgreens.
Company records show he set up an Irish company, along with his wife Olga, a few days before Christmas, called Mistletonia. It subsequently changed its name to Retail & Consumer Insights, and remains registered to a Donnybrook, Dublin 4 address. Surely that must be considered behind enemy lines for a Munster man?
