The Irish government’s drive to attract big technology companies by offering tax breaks could go into meltdown after ministers in Brussels agreed in principle to give the regulator in each country binding powers over the entire 28-state European Union.
Known as the “one-stop shop” approach, it means that companies doing business in the European Union will only have to answer to the data protection authority in the country in which they are based, rather than all the watchdogs in separate states.
But with so many tech businesses setting up their Euro HQs in Ireland – including Apple, Amazon, Google, Facebook, eBay, PayPal, LinkedIn, Twitter, Salesforce.com, Intel and Oracle – to take advantage of tax breaks, the Irish Data Protection Commissioner’s workload will explode.
In the UK alone, the Information Commissioner’s Office has a budget of nearly £20m and estimates it is facing a £42.8m black hole in its finances, if the new EU Data Protection Regulation is passed.
By comparison, the Irish office has a budget of £1.3m. There have already been serious concerns over how such a small organisation can possibly regulate the likes of Facebook (with revenues nearing $3bn) and Google (on $50bn) but these fears are likely to escalate if the one-stop shop plan gets the official green light.
Perhaps unsurprisingly Irish Justice Minister Alan Shatter is strongly against the idea but he has been out-voted, with other countries agreeing to the plan “in principle”.
And EU justice commissioner Viviene Reding said the scheme would “further simplify things and reduce the danger of duplicating work”, adding: “A citizen who has a problem will address himself to his own data protection authority, not as is currently often the case, a foreign authority.”
Reding said the decision to rubber-stamp the move sent a message to the European Parliament that consensus can be reached. The proposed law must be approved by the Parliament before it can enter into force. Discussions on the full text of the draft Data Protection Regulation have stalled in Parliament with politicians attempting to wade through more than 4,000 possible amendments.
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