Penny finally drops as tech giants drop referendum ads

Business Week: budget bust-up looms for FF and FG; job news; property prices; and banks

 

There were signs this week that the penny has finally dropped in Silicon Valley with regard to the dangers of foreign interference in domestic politics, following Russia’s alleged role in the election of US president Donald Trump, and Britain’s vote to leave the EU.

Fearing more scrutiny and regulation following recent outcry on data hoarding and microtargeting of voters, both Google and Facebook moved within days of each other to take action that suggests they are taking these matters seriously.

Facebook said it would no longer accept advertising relating to the referendum on the Eighth Amendment from organisations outside the Republic. This was, it said, “to help protect the integrity of elections and referendums from undue influence”.

Then, Google got in on the act, but actually went a good deal further. It banned all advertisements in relation to the referendum, both foreign and domestic. It was a bold move and the effects of the precedent it has set for elections in other jurisdictions remains to be seen.

Opinion is divided as to whether or not such advertising bans are the way to go in the digital age.

The decision applies to all Google’s advertising platforms, including AdWords and YouTube. It also brings it into line with messaging app Twitter, which has not allowed any advertising in relation to the referendum from the outset.

There were other significant developments for tech giants. Google announced a €150 million expansion at its data centre in Dublin in a move that brings the company’s total investment in the Republic since 2003 to €1 billion.

In the west, the long-running Athenry data centre saga was finally decided with Apple releasing a statement to say it would not be proceeding with the development due to the planning delays that have dogged it since 2014.

Incidentally, Apple was named as the State’s biggest company in The Irish Times Top 1000 database this week, catapulted from 11th last year after the scale of its operations were disclosed in the wake of the European Commission’s investigation into its tax affairs.

A couple of hours south of Athenry, there are concerns for 450 jobs at the Aughinish Alumina plant in Limerick, due to links its parent company has to Russian billionaire Oleg Deripaska.

A delegation of Government officials was in the US to tell senior figures in the Trump administration that Washington’s recent sanctions on Russian individuals and businesses have inadvertently placed the future of the plant “in jeopardy”.

Is divorce in the air for FF-FG deal?

Tensions have emerged in the marriage of convenience that is the Fianna Fáil/Fine Gael confidence and supply deal in recent weeks, and divorce may not be too far down the tracks.

The arrangement is due to end after October’s budget, and, while Fine Gael is keen to give things another go, Fianna Fáil just seems to want to move on. It was this dynamic that was at the centre of a tiff this week over how much cash is available for the budget.

Minister for Finance Paschal Donohoe is expected to withdraw extra spending of at least €800 million that had been understood would be available. Fianna Fáil reckons the move is all bluster and designed to make Opposition party look reckless ahead of a likely general election.

One way the Government could raise extra funds would be to increase excise duty on diesel. Matching it to that of petrol would raise more than €500 million for the State’s coffers while driving down harmful emissions from diesel vehicles, an Oireachtas committee was told.

The assessment, by Prof Edgar Morgenroth of Dublin City University’s Business School, is likely to be shot down – at least for now, with the haulage industry under significant threat from Brexit, Government sources said.

Meanwhile, Bus Éireann announced a campaign to recruit almost 200 new drivers and mechanics for roles across the State. The State-owned transport company is to receive €4 million from the National Transport Authority to expand its regional services.

Up north, Entekra, a Monaghan-based design, engineering and manufacturing company, announced plans to create 100 jobs following a $55 million (€46 million) investment, while Cork-based software group Teamwork.com is to create 85 jobs in Belfast at a new development and support hub.

Building activity ramps up, but

will property prices fall?

There must have been some furrowed brows among recent homebuyers when they heard Central Bank governor Philip Lane warn of a possible drop in property prices.

Lane was speaking after the latest figures from the Central Statistics Office showed prices accelerated by 12.7 per cent in the year to March, compared to an annual increase of 12.5 per cent in February.

With supply set to ramp up in the coming years, Lane said there was a “material risk of a reversal” in house prices due to a possible period of higher interest rates in Europe, a possible slowdown in income growth, Brexit and risks to international trade.

It emerged this week that Cairn Homes is planning to build 320 residential properties on its Griffith Avenue site in Dublin 9.

Such is the level of activity, the Construction Industry Federation (CIF) said it will need to find 112,000 workers if it is to deliver the €17.8 billion in expected building. It is even trying to cope with demand by tempting former workers home from abroad with a new website, cifjobs.ie.

In terms of those people who are actively looking to buy a house, Bank of Ireland said it expects to deliver €325 million of mobile mortgage sales this year as rising competition in the market forces banks to take to the roads to visit potential customers.

Of course, there are still thousands of people in mortgage arrears. Central Bank deputy governor Ed Sibley had some crumbs of comfort for them when he said there was “absolutely no evidence” that vulture funds were acting more aggressively than mainstream banks in their dealings with these customers.

Finally, the private rental market got a new player in the shape of Axa Investment Managers – Real Assets, which took a 50 per cent stake in a 1,173-unit residential property portfolio held by Kennedy Wilson, one of the country’s biggest institutional landlords.

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