Stuff that happened last week:

1. Google got told to forget some europeans.

 

So the big news that is rocking the blogosphere (truly – everyone is talking about it), is the recent ruling by the European Court of Justice. The background:

• Mario Consteja Gonzalez ran into debt in 1998.
• His home was attached and sold at auction as part of the recovery of his social security debt (no word on how he managed to have social security debt).
• As part of that process, the auction was advertised by a newspaper (La Vanguardia).
• Mario was unhappy that a Google search of his name leads you to that newspaper advertisement.
• So he sued La Vanguardia to get them to take down the advert. He also sued Google to get them to “forget” the advert in its search results.

Since then, La Vanguardia has won its side of the case, and doesn’t have to take down the advert. But Google has been told that it is the information gatekeeper, and therefore, it has to remove the link for searches associated with Mario’s good name (in case you’re interested, here is the official court ruling – the interesting bits are paragraphs 14 through 19, and the jargon-y ruling right at the end).

In the process, of course, Mr Gonzalez has guaranteed that his name and his real estate auction will never be forgotten, as he is now the subject of innumerable news articles, court transcripts, opinions, comments, and blog posts. But his dented pride will, I’m sure, be significantly boosted by the fact that he’s now the little man that successfully sued Google.

The trouble is: this is not the most pragmatic ruling to implement. Can anyone just request to have their personal data removed from search results? The general consensus seems to be that Google should just refuse every request, and let the applicants take them to court.

Having read the ruling (“read” is a strong word – maybe “skimmed” is better), it seems to me that the court ruled on a technicality. Bear with me:

• There is an EU directive out there in the ether which imposes the responsibility on data controllers to protect individuals “with regard to the processing of personal data”.
• But in order for the directive to apply, the data controller has to have an establishment in the country where the data is originating from (basically: the guy is Spanish; therefore, there had to be a Google company located in Spain).
• Google Inc. (the search engine) is not located in Spain.
• There is, however, (surprise surprise!) a company called Google Spain, which sells advertising space and collects advertising revenue for Google in Spain!
• So even if Google Spain didn’t do the data controlling itself (this is helpfully done by the web bots of Google Inc.), the courts decided that the selling of ad revenue by Google Spain was sufficiently tied to the processing of personal data by Google Inc. that the EU directive should apply to Google Inc. as well.

If I were sitting in Google’s court (#irony), I’d be reframing the problem as one of “well then let’s not have Google establishments in Spain”. Of course, it would have been easier if they could just have won the court case. But no matter. Now Google Inc. just has to convert Google Spain into an agent to whom it contracts out the selling of advertising space (that is: with a separate shareholding structure – but, you know, nominee shareholders are a director’s fee a dozen), and presto: awkward court ruling avoided (voided?).

And this – this is partly why big companies like tropical islands with small populations. It’s not just about tax avoidance. It’s about avoiding foolishness: because how much sense does it make that La Vanguardia has the right to leave the offensive information on its website, but Google has to edit it out of search results?

Madness.

2. Australian austerity?

Mr Abbott’s government just announced a deficit-bashing budget. The changes:

• for the next three years, high income earners (earning more than A$180,000) will be subject to a 2% deficit reduction levy
• a $7 fee to visit a doctor (presumably, prior to this, doctor visits were on the State);
• lower family welfare benefits;
• if you’re under 30, expect to experience delays in gaining access to unemployment benefits;
• job cuts in the public sector (specifically: 16,500);
• allowing universities to set their own tuition fees;
• a bi-annual re-indexing of duties charged on fuel (after all, fuel prices shift all over the place with the oil price and exchange rates – why wait a full year to adjust excise duties?).

Then Mr Hockey, Australia’s Treasurer, made this bizarre statement:

“The age of entitlement is over. It has to be replaced, not with an age of austerity, but with an age of opportunity.”

If there was a speech bubble floating above my head, it would currently be blank.

I’m just not sure that you can just decide to rename austerity “opportunity” without some kind of logical link.

3. An Awkward Amplats Apology.

Last week, Anglo American Platinum Chris Griffith said this in an interview with the Business Day:

“Am I getting paid on a fair basis for what I’m having to deal with in this company? Must I run this company and deal with all this nonsense for nothing? I’m at work. I’m not on strike. I’m not demanding to be paid what I’m not worth.”

This was in response to a question about his R6.7 million basic salary, and total package of R17.6 million.

To be honest, I think that his frustration was creeping through there a bit, eh? It’s the kind of response that gets the interviewing journalist all warm and fuzzy, like their story is just about to go viral. Although I don’t think he’s wrong (Why Executives Deserve To Get Paid The Big Bucks).

But here’s what he said before that (also at the heart of the outcry):

“There’s a salary number for a certain skill that will enable employment and enable people to have a living wage and employment, and for business to prosper. Ultimately, all those ranges depend on skill, education and supply and demand. In South Africa, we have 35% unemployment. Do we want higher unemployment so fewer people can be paid more? If this debate is around the comparison of CEO pay and somebody else, then we’re completely missing the point. There is a greater supply of lower-skilled people. What the unions are doing is putting more people on the street.”

That point is fair. Obviously because it’s one I’ve raised before (this post: Trade Unions, The Bastards).

And also, this one in his later apology letter:

“The Association of Mineworkers and Construction Union’s demand for a minimum basic wage of R12,500 remains unaffordable as it would increase our costs by about R4.5bn a year.”

R4.5 billion is not the same as a R18 million CEO salary package. Mr Griffith’s remuneration is not even half a percent of that ask.

It just isn’t the same conversation.

Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.