Lessons from the month of May

As Leaving Certificate weather creeps in and brings us a little more sunshine, we’ve decided to look back on the month that was – and share what we’ve learned from some of the biggest stories in business news. 

1. Data remains king

 The owner of WhatsApp, Instagram and Facebook has been slapped with a record fine of €1.2bn (£1.04bn) by the Irish data protection regulator – the biggest fine ever levied for breach of the general data protection regulations (GDPR). The firm has since been ordered by Ireland’s Data Protection Commission (DPC), which regulates Meta across the EU, to suspend the transfer of user data from the EU to the US. This suspension, however, is not immediate and Meta has been given five months to implement it.

The issue has been ongoing for a decade after privacy activist Max Schrems instigated legal proceedings in 2013 against Facebook, as the company was called at the time. Meta said it would appeal the decision and there would be no disruption in service, further stating that it was “unjustified and unnecessary” and sets a “dangerous precedent”.

It’s been a weird time for the artist formerly known as Facebook to feel relevant in an increasingly TikToking world. Many claim that the fine is a strike against surveillance capitalism, with criticisms coming in hot and heavy since its inception into public cognisance in May 2018 (these criticisms generally centre around not effectively curtailing the worst data practices of Big Tech). As for what is yet to come? According to Meta’s president of global affairs, Nick Clegg, global anarchy. He recently said in a statement that the company is appealing the decisions with courts that will be able to “​​pause the implementation deadlines. Without the ability to transfer data across borders, the internet risks being carved up into national and regional silos, restricting the global economy and leaving citizens in different countries unable to access many of the shared services we have come to rely on.” “The arguments around GDPR, Big-Tech regulation and surveillance capitalism are complex and far-reaching,” says Fitzgerald Power CEO, Stuart Fitzgerald. “On a personal level none of us like being the product that Big-Tech sells to marketers. However, at the company level there are probably relatively few Irish SMEs that haven’t used tools such as cookie-enabled retargeting campaigns to build brand awareness, and at a macro level Meta, Google et al are a critical part of Ireland’s economic success. It will be very interesting from an Irish perspective to see how this develops.”

2. CHC CEO Conspiracy

The former chief executive of Custom House Capital (CHC), Harry Cassidy, has been sentenced to six years and 10 months in jail for conspiracy to defraud investors, a lenient sentence against the suggested 14 years by Judge Orla Crowe. 

What had happened at CHC had been a highly organised, systematic, and gross abuse of trust, with the victims being “blameless people” who had trusted the company with their investments. That the fraud involved pension money was a “particularly aggravating factor”, she said.

Three fellow senior executives were too handed down sentences for their roles in the decade-old conspiracy; John Whyte (53), former head of private clients was given a sentence of four years;  Paul Lavery (47), head of finance, received a sentence of three years; and John Mulholland (73), non-executive director of Custom House Capital (CHC), was handed a 12-month sentence.

When High Court inspectors were appointed to CHC in 2011, they found that €56 million of client money had been inappropriately transferred to property investments. A liquidator was later appointed to the company, with the process of winding down the company expected to continue until 2025.

It’s a move we mercifully haven’t seen in a while but one to remind us of our ever-growing divide between rich and poor. “From Dolphin Trust to Bernie Madoff, the wealth management playing field is littered with stories like this” according to Stuart. “While tighter regulation has to be part of the answer there is a lot to be said for selecting credible wealth advisors who can clearly demonstrate how and where your pension funds have been deployed.”

3. The Noughties are back!

Dust off your bootcut jeans, frosted tips and brown shoes because 2005 is so hot right now! Paris Hilton is in the news, Ireland is winning Grand Slams and Juicy Couture is back on teenage girls. And to top it all off: HMV Dublin is making another go of it. HMV’s rollercoaster ride in Irish retail will restart this summer with new owners hoping it is a case of third time lucky; the music retailer is opening a flagship store in Dublin city centre where two previous incarnations faltered in the face of rapidly changing consumer habits.

It shut up shop in 2013, but within weeks, a resuscitation operation was launched and the company put on life support, with the Henry Street outlet among a handful reopened as the new owners agreed to honour the vouchers. In 2016 it closed again, until in 2019, when Canadian record store company owner Doug Putman bought the UK business for less than €1 million having acquired the Canadian division two years earlier. The vinyl-loving billionaire appears to have the Midas touch, with HMV’S 120 shops in the UK, including an outlet in Belfast, turning a profit last year, a remarkable turnaround by any measure. The Dublin shop will be spread over three floors stocking 5,000 vinyl albums, 5,500 CDs as well as “over 3,000 pop culture products and 1,000 different T-shirt designs”.

For all the faux-lanthropic billionaires out there, this is one everyone can surely get behind. And of course, three cheers for no mention of Bezos at all in this paragraph! “My dad has been telling me for years that vinyl is making a comeback,” Stuart laughs. “Looks like he was right. I’m scratching my head with CDs though. Not sure what the appeal of that particular format is, in this day and age. Maybe I’m missing something very obvious. In any event, it’s nice to have HMV back. I enjoyed many a wasted afternoon in their Grafton Street store in my college days.”

4. The US Debt Ceiling Deadline is to be extended

President Biden has urged Congress to pass a deal to raise the government’s borrowing limit and prevent a potentially catastrophic default on US debt repayments. If approved, it would allow the federal government to borrow money until well after the next presidential election due in November 2024.

The House and Senate reached an agreement in principle Saturday to raise the debt ceiling for two years and cap spending, moving the US one step back from the brink of a historic default, which, if it were to happen, would upend stock and bond markets. It would also cause severe damage to the US and global economy. In a statement, President Biden described the agreement as a compromise which was good for the country “because it prevents what could have been a catastrophic default and would have led to an economic recession, retirement accounts devastated, and millions of jobs lost”.

Every so often, US Congress must vote to raise or suspend the ceiling, so it can borrow more to pay its bills (federal employees, the military, Social Security and Medicare etc). Currently, it is a measly $31.4tn (£25tn). “The polarisation of American politics and society is a worrying feature of modern life. While Ireland’s political class isn’t without fault, there’s a lot to be said for the economic stability that has been delivered over the last 13 years or so,” says Stuart.

Overall impressions? It’s a content summer and we’re all just living in it. As Succession ends and Philip Schofield’s story grows more legs than primitive arthropods, everything feels closer and closer to becoming its own six-part Netflix documentary. We’re already living in the metaverse. And each invitation to be entertained reinforces an impulse: to seek diversion whenever possible and avoid tedium at all costs. 

Thankfully, we have billionaires, and quite regularly, the whole population of the US, to laugh at and be mildly aroused by. Until then, we can just thank our lucky stars we don’t work on This Morning. As for what to be excited about next month? Why Love Island of course! Strap yourself in for a few feral weeks of escapism; tans, teeth and titillating conversation to come. It may even prove more fascinating than UK politics at the minute. At least, one can only hope. 

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