Most of the world’s Dropbox users now have a relationship with ‘Dropbox Ireland’, a newly announced entity that handles all data for users outside of North America.
The cloud file storage company announced the move on the weekend, casually telling at least 200 million of its 300 million users that it had updated its terms of service “to better serve you and the growing number of Dropbox users around the world” by delivering its service from Ireland.
The message would apply to around 70 percent of Dropbox’s users who live outside of the US, according to a report from the Financial Times last year about the company’s plan to open new local offices in the UK, Australia and Japan as part of its plan to cash in on the enterprise potential of consumers who used the app.
But the company’s first international office was actually in Dublin, Ireland, and came in 2012 when it “decided to listen to common sense and jump the pond".
For tech, tax and privacy watchers, Dropbox’s first non-US wouldn’t have been surprising. The country is the second home to Apple, Microsoft, Amazon, Facebook, Adobe and other Silicon Valley heavyweights.
The changes Dropbox announced on the weekend apply across the board for its products and “include the fact that we'll be providing our services (including Dropbox, Dropbox for Business, Carousel, and Mailbox) to you via Dropbox Ireland starting on June 1, 2015.”
New users who sign up before June 1 will be served from Dropbox Ireland from May 1, 2015, according to its updated terms of service.
The updated terms of service apply to everyone who lives outside of the U.S., Canada and Mexico, but the company has said nothing of the changes it means to data protection legislation that applies to its non-US users.
In April Twitter made a similar announcement, flagging that all account information for Twitter users outside the US would be handled by Twitter International in Ireland and therefore subject to the EU’s Data Protection Directive.
Dropbox didn’t make the same point but it seems that users who have responded to the change on its support pages don’t understand how the move to Ireland will improve the user experience, as the company claimed. Indeed, the view from users is that it's a shareholder driven move to reduce taxes.
Companies with non-US operations served from Ireland have come under pressure for both tax and privacy reasons. At the same time. Ireland's data protection authority has come under scrutiny for not being tough enough on US tech companies and lacking the resources to regulate them.
An Austrian court is currently weighing up a decision as to whether the social network can face a class action in the country for violating user privacy. Apple and other companies are also being question by EU regulators over the role their Ireland operations play in tax arrangements related to intra-company pricing.
This article is brought to you by Enex TestLab, content directors for CSO Australia.