Where is Facebook located? Well, if you’re the taxman, Facebook’s global HQ is a tiny shed somewhere in Ireland, where Facebook can escape virtually all taxation; but on the other hand, if you’re the EU, Facebook is headquartered in America, where the General Data Protection Regulation doesn’t apply.
It’s a remarkably ballsy bit of legal fictioneering: Facebook has spent a decade solemnly swearing that it is a European company, able to take advantage of Ireland’s lawless tax-havens. But European companies have to comply with the most stringent privacy rules in the world, so Facebook is claiming to straddle multiple jurisdictions, being European for tax purposes and American for privacy purposes.
To accomplish this fiction, Facebook is making 1.5 billion users click through a new EULA that says, “By clicking I Agree, I acknowledge that I am a user of Facebook, USA’s services, and have no connection with those filthy, privacy-respecting Europeans.” And voila, with the click of a mouse, the solemn, decade-long arrangement by which Facebook has claimed that its users were inextricably, utterly connected to Ireland is severed like the frayed thread it always was.
This is the third leg of the Big Tech/jurisdiction question. Telegram can outmanuever Russia by hiding behind giant US cloud companies; the US bases of the cloud giants means that the US exports all its worst laws to the whole world — and Facebook’s ridiculous games with territorial fictions shows us how fragile the whole thing is, because companies are not US-based or EU-based under late-stage capitalism: they are freefloating entities who exist everywhere and nowhere at once, depending on which fiction suits them best.
Don’t miss this kicker: “Facebook said the latest change does not have tax implications.”
Ireland was unaware of the change. One Irish official, speaking on condition of anonymity, said he did not know of any plans by Facebook to transfer responsibilities wholesale to the United States or to decrease Facebook’s presence in Ireland, where the social network is seeking to recruit more than 100 new staff.Facebook released a revised terms of service in draft form two weeks ago, and they are scheduled to take effect next month.
Other multinational companies are also planning changes. LinkedIn, a unit of Microsoft Corp, tells users in its existing terms of service that if they are outside the United States, they have a contract with LinkedIn Ireland. New terms that take effect May 8 move non-Europeans to contracts with U.S.-based LinkedIn Corp.
LinkedIn said in a statement on Wednesday that all users are entitled to the same privacy protections. “We’ve simply streamlined the contract location to ensure all members understand the LinkedIn entity responsible for their personal data,” the company said.
Exclusive: Facebook to put 1.5 billion users out of reach of new EU privacy law [David Ingram/Reuters]