Plans by Apple to construct a data center in Ireland at a cost of $1 billion have been scrapped. This has been seen as a blow to Ireland efforts of attracting tech investment from all over the world. According to Apple the decision was made following planning hold-ups. In a statement the iPhone maker said that the approval process had been delayed despite the best efforts of the company. Consequently Apple was forced to make alternative plans.
This comes after controversy that was ignited by the tax affairs of Apple in Ireland following the ruling by regulators in the European Union which stated that the Cupertino, California-based tech giant got a sweetheart deal and this amounted to illegal state aid. The Irish government and Apple rejected the findings and they have consequently filed an appeal seeking to have the European Court which is located in Luxembourg overturn the ruling.
Foreign direct investment
Though Ireland has managed to recover from an economic crash which forced an international bailout eight years ago it is still heavily relies on foreign direct investment to provide tax revenue and jobs. The decision by Apple came at a time when Dublin has resisted a EU plan of taxing big tech firms based on the revenues they generate. This is just the latest move by Brussels in a bid to crackdown on the tax strategies of American tech giants.
The data center that Apple was supposed to build in Ireland was proposed a couple of years ago and was to be located in Western Ireland. It was supposed to be the largest private investment in the region and was seen as an attempt of rebalancing growth away from the country’s capital. Due to planning disputes a case was even taken before the supreme court of Ireland and Apple announced the cancellation of its plans just before the appeal hearing.
Though the prime minister of Ireland, Leo Varadkar, has tabled proposals aimed at fast-tracking the planning for critical infrastructure including data centers, any new laws might be coming a bit too late for the iPhone maker. Varadkar’s government has consequently become the recipient of sharp criticism.
“Ireland’s message that it is open for business has been seriously called into doubt. The fact the company has referenced the ongoing delays in the planning process for this decision not to proceed sends a dangerous message to future international investors,” Billy Kelleher, a business spokesperson for Fianna Fáil, an opposition party, said.