It is one of the most prestigious jewellery houses in the world, with its pieces worn by royalty and celebrities alike. In London, King Edward VII referred to Cartier as “the jeweller of kings and the king of jewellers”, while for his coronation in 1902, Edward VII ordered 27 tiaras and issued it with a royal warrant in 1904. More recently, it has been named the world’s top luxury brand.
Now, however, Cartier, based in Paris but owned by a Swiss luxury goods conglomerate, is gearing up for a battle in the Irish courts.
Normally, Cartier would be the dominant beast in the fight. With €6.1 billion in annual sales and, in Anton Rupert, an owner worth €7 billion, Cartier is a global giant. In this case, however, Cartier, despite its heritage and its profits, has been reduced to the tole of the underdog.
Yesterday, the jeweller launched court proceedings against Facebook Ireland, the main Irish subsidiary of the US social media behemoth. To put this subsidiary into context – Ireland took in taxes in 2019 of €59.3 billion, while Facebook Ireland Ltd had revenues of €25.9 billion. This one subsidiary is essentially a small nation state.
The case relates to posts on Facebook by counterfeiters claiming to be selling Cartier products. The luxury goods company had gone to courts in other countries to defend its brand, and this time it is landing in Ireland. It has retained law firm LK Shields to handle its case in Dublin.
The case is being taken here because so much of Facebook’s IP is rooted here, and because Dublin houses its international headquarters.
I will come to the scale of Facebook’s operation in a moment. But it important to place some context around this case as the latest in a string of actions to come before the Irish courts in relation to the activities of social media giants.
In essence, Dublin is becoming the legal home for global actions against the likes of Twitter, Facebook and Google.
Take Wissam Al Mana, a Qatari billionaire whose family have interests in 55 companies across eight countries – operating across multiple industries such as retail, media, automotive and luxury goods.
Papers were formally lodged against Facebook Ireland Limited in an effort to find out who had posted false advertisements about him.
Al Mana, a UK-based Qatari national, has brought proceedings over adverts on Facebook he says are wrongly and maliciously using his name and image.
They were published on several occasions since May 2019 by people using the Facebook Ads Tool, he says.
The adverts contain a fake news article, using sensational headings and featuring his name and image, he says. They wrongly link him to a cryptocurrency auto-trading programme called Bitcoin Trader, which he has nothing to do with, he says.
In recent weeks, proceedings were lodged in the High Court on behalf of Moldovan air cargo company Aerotranscargo against an aviation journalist based in Greece, and Twitter, over tweets about a flight to Libya.
Another trend has seen companies like Twitter and Google named as co-defendants in a narrow context – either because a plaintiff wants to secure a court order that will compel them to reveal a poster’s identity, or because a person is applying for defamatory material to be taken down. This is quite different from suing social media giants for damages.
There has been a huge spike in the number of actions against social media companies in the courts in Ireland, a point made by my colleague Francesca Comyn in a recent article. Many, but not all, relate to defamation.
A potential allure for would-be litigants is that Ireland’s defamation regime is perceived as being plaintiff-friendly with high jury payouts. As far back as 2014, Jessica Biel and Justin Timberlake used the Irish courts to sue UK magazine Heat for defamation, despite the fact circulation numbers in Ireland were much lower than in Britain and Heat’s publisher is the German giant Bauer.
As Francesca wrote:
“Add to the mix the rise of social media, where the limits of free speech go way beyond publishing norms – think back to Facebook CEO Mark Zuckerberg’s appearance before a US Senate committee last year where he said the social media site would allow politicians post any claims – even false ones – in their ads.
“Then factor in that these same big tech multinationals have based their European operations in Ireland and conditions would appear ripe for defamation to become a substantial growth industry for Irish lawyers.”
Facebook’s Irish billions
Ireland is the obvious place to take cases against Facebook given the scale and scope of its interests here. Over the course of our Mapping Multinationals series, we looked in-depth at the social media giant’s Irish operations, revealing the flows of capital and IP into and out of Ireland.
At the start of 2010, Facebook Ireland Ltd was just over one year old. It had €5 million on its balance sheet and 64 employees. By the end of that year, those two figures had risen to €250 million and 151 respectively.
Jumping to 2018 accounts, Facebook’s Irish operation has grown 100-fold. It employed 1,400 people here that year, nearly all of them at Facebook Ireland Ltd, which in turn charged other group companies for staffing. Their average annual salary was just under €104,000, which places the company in the middle of the league among tech multinationals – but each also got an average share-based payment of nearly €45,000, placing them ahead of their counterparts at Google or Microsoft.
Facebook Ireland Ltd sold €25.9 billion worth of targeted advertising in 2018. Out of this, the company generated a paltry €361 million in net profit. This is primarily because it paid €24.4 billion in administrative expenses.
Facebook has been moving a lot of cash back to its US parent and its shareholders. Now that profits accumulated offshore are deemed taxed under the 2017 US legislation, Facebook repatriated $14 billion in dividends in each of 2018 and 2019, joining other Irish-based multinationals in a distribution frenzy.
As Thomas Hubert reported, in the past three years, it has registered a series of new subsidiaries here. Registered in 2018, FB Representative Services DAC acts as the group’s data controller in Europe under new GDPR legislation – much like WhatsApp Ireland Ltd for the Facebook-owned instant messaging service.
Facebook International Treasury Operations Ltd and Facebook International Services Ltd were created in 2018 to provide services for the wider group. Meanwhile, two Irish companies held directly by US parents manage specific businesses out of Ireland: Facebook Technologies Ireland Ltd is the conduit for sales of Oculus virtual reality headsets around the world and has a research and development office in Cork, while Calibra was registered on Grand Canal Square last year to manage Facebook’s proposed cryptocurrency Libra – though the plan has hit stern opposition by central bankers everywhere since then.
Cartier’s legal history
Cartier has never ben shy in defending its brand. In 2018, it took a case against British Sky Broadcasting and a number of other internet providers in an effort to remove a counterfeit site accused of infringing its copyright. There was no suggestion that the ISPs had themselves committed any act of infringement or that they were liable for any infringements by the target website operators. They were “mere conduits”. In the British case, the Supreme Court held that that the courts could now grant website-blocking injunctions where intellectual property rights were involved.