Irish luck running out for US tech firms

Gavin Kearney has a telescopic view of the threat facing Dublin’s Silicon Docks, the watery frontier of Ireland’s tech sector. He is braced this week for the first of three verdicts that will have sweeping repercussions on both sides of the Atlantic.

Since Kearney founded the encryption business Jumble two years ago, he has watched Ireland come under fire from the European Court of Justice, the European Union and the U.S. Department of Justice.

The cases involve Facebook, Apple and Microsoft and will decide critical issues confronting the tech industry: data protection and privacy, and corporate tax strategies. The results could spoil Ireland’s reputation as a tech hub, spark an exodus of jobs and investment, and force some to pay hundreds of millions in back taxes.

“If somehow Ireland’s data protection was eroded to be more American and less EU, those entities affected may have to relocate some of the operations to restore the balance,” said Kearney, the chief executive of Jumble. “There’s a bit of a perfect storm in terms of the timing of these issues hitting, but it’s a continent-wide problem and not just a standalone country, so we can shore up against it.”

The legal blizzard is expected to hit like this: This week, authorities for the 28 EU countries will decide whether to crack down on certain data transfers from Europe to the U.S. Several weeks later, the European Commission will decide whether the country’s generous tax breaks to Apple were illegal. Finally, the U.S. Court of Appeals for the Second Circuit will rule whether emails stored in Microsoft’s servers in Dublin belong to the company or the client. Read the rest of the story.