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There is Something About Munich

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John Naughton is a rare and exotic creature. Having just read his bio we seem to share an Irish heritage and as children we both encountered the Jesuits, but people who read the Observer, the Sunday version of the Guardian, will know him, as I do, as a journalist. Yet his career has been within academia where he currently glories in the title of Professor of the Public Understanding of Technology at the Open University.

Ploughs his own furrow

A great many of the techie academics I have had dealings with over the years have frequently seemed to me largely to be outriders for the industry. Whether or not this is because they rely upon high tech firms for research grants I don't know. More likely, they simply share the values and outlooks of industry leaders, but Naughton appears to be a very unreliable witness. Doggedly he ploughs his own furrow. You never know who or what he is going to upset or praise from one week to the next.

Facebook and Deloitte in the firing line

In his article in this week's edition Naughton lights upon Facebook and Deloitte. The trigger was a speech made by Facebook's CEO in Munich last week. Sheryl Sandberg is reported in the New York Times as saying, in essence, that Europe's politicians should concern themselves with reviving their ailing economies rather than carry on with their crazy obsession with privacy. Hmmm. Is this the same Facebook that, two months ago, entered into a settlement with the US Government's Federal Trade Commission in which it agreed to subject itself to independent reviews of its privacy practices for the next 20 years? I think it is. Not an exclusively European preoccupation then.

Cui bono?

In his piece Naughton focuses on the politics underlying Sandberg's Munich speech. He is scathing about what he sees as a thinly veiled threat by Facebook to rip into Europe's rulers for getting in the way of Facebook's relentless growth. Now at one level I think it is a little harsh or unworldly to expect businesses not to do whatever they feel they have to do in order add value to their enterprises, although I agree it is galling almost to the point of distraction when they try to dress it up as if they had a wholly disinterested or altruistic concern to help other people.

A large part of Naughton's ire seems to be directed more at Facebook's accomplice, Deloitte. They provided Sandberg with a raft of "facts" in a report which they prepared. It's called "Measuring Facebook's economic impact in Europe". You get the picture? Facebook's pitch is its either jobs or its privacy. Subtle? No.

The economic case

Seemingly Facebook claim that, indirectly, they have helped "support" 232,000 jobs in Europe in 2011, generating 32 billion Euros in revenues which converted into an economic impact of 15.3 billion Euros. Sounds good, even if the meaning of these claims is obscure.

Allow me to quote Naughton

....you couldn't make this stuff up. Or, rather, only an international consulting firm could make it up.

Actually, Naughton then goes on partially to excuse Deloitte because he quotes extensively from the multiple caveats which they issued with the report

The information contained in the report has been obtained from Facebook Inc and third party sources that are clearly referenced in the appropriate sections of the report. Deloitte has neither sought to corroborate this information nor to review its overall reasonableness. Further, any results from the analysis contained in the report are reliant on the information available at the time of writing the report and should not be relied upon in subsequent periods. (Emphasis added.)

.....no representation or warranty, express or implied, is given and no responsibility or liability is or will be accepted by or on behalf of Deloitte or by any of its partners, employees or agents or any other person as to the accuracy, completeness or correctness of the information contained in this document or any oral information made available and any such liability is expressly disclaimed.

And then

Based on my own reading of the report I found an additional sentence from Deloitte which brought a wry smile to my face

As set out in the Contract, the scope of our work has been limited by the time, information and explanations made available to us.

Naughton projects more than a hint of disapproval of what Deloitte did. Seems almost like they sent their headed notepaper to Facebook and gave them permission to write whatever they wanted on to it.

Munich 1999

All this took me right back to 1999, and also to Munich. It was a conference organized by the Bertlesmann Foundation. The keynote speaker was Ira Magaziner. Magaziner was a close friend of Bill Clinton, then President of the USA. Until the previous year Magaziner had been the Administration's "Envoy" to the internet community. Indeed I met him in that capacity at the White House.

In Munich in 1999 Magaziner was free of the shackles of office, by then having left politics. I cannot remember with complete certainty if it was in his prepared speech or if it was in response to questions from the floor but he said something that day which has stayed with me ever since.

It concerned European attitudes towards privacy and how they were then also "getting in the way". At that time, in their fundamentals our privacy laws were the same as they are now, that is to say very different from the USA's. Magaziner words went roughly like this

I would sit in the White House and pretty much every day an American company would come and see me to complain about Europe's 'whacky', excessively restrictive laws on privacy. Each of the companies I am thinking about was considering investing somewhere or other within the EU but they were greatly irked by the local data protection laws. I would explain that we had made our views known on this subject but the Europeans seemed quite determined to stick with what they'd got.

My guess is about one-third of the firms I saw decided to comply with all of the European privacy requirements from the off and went ahead with the investment. About a third went ahead with the investment but didn't comply and were happy to let it ride for as long as possible or ideally forever. And a third decided not to bother at all. They stayed at home or went somewhere outside the EU. It is this last group that European politicians should think about most. I wonder how long their electorates will forgive them for depriving them of work simply in order to defend privacy laws that most people have never even heard of?

There you go.