Thursday 17 October 2019

'Things like housing are issues we care about. It's a balance on how to get this right'

In an exclusive interview with Adrian Weckler, Google CEO Sundar Pichai talks about the Dublin housing crisis, fitting in with the local community, and the tech giant's often frosty relationship with the EU

World leader: Google CEO Sundar Pichai. Photo: Steve Humphreys
World leader: Google CEO Sundar Pichai. Photo: Steve Humphreys
Google
Bolands Quay, the new Google development in Dublin’s Docklands. Photo: Steve Humphreys
Margrethe Vestager
Adrian Weckler

Adrian Weckler

'Eoin Morgan." In a primary school in Dublin's Ringsend, 47-year-old Sundar Pichai is talking to me about cricket. "Good player," he says of the Irishman who captains England's one-day and Twenty20 international sides.

Like many kids growing up in India, Pichai dreamed of becoming a professional cricket player.

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Instead he ended up as CEO of Google.

As such, he spearheads the most powerful, most influential information gateway in history. Google's services - whether in search, email or video - are used by almost every internet user every day.

This week, he was in Dublin to announce a partnership with Barnardo's children's charity around online safety.

But he also agreed to talk to the Irish Independent about some of the big issues his €780bn company faces, from its position in Ireland to Google's overall societal responsibilities.

In Dublin, Google is now the largest industrial employer, with 8,000 people - and possibly more to be hired. With staff salaries averaging close to €100,000, rival tech companies in Dublin now compete for workers at similar rates.

It is a professional ecosystem that has created wealth and opportunity for tens of thousands, but has also had a knock-on effect for non-tech workers in the form of housing affordability. Nurses, teachers, retail workers and others can barely afford to live in the city any more.

In Google's San Francisco Bay Area region, where the housing situation is even worse, the tech giant has come up with an answer: $1bn to subsidise general housing stock.

The idea is that communities will fall apart without workers of all types, and not just highly-paid tech staff, being able to afford a home.

So Google wants to be a good neighbour and corporate citizen by contributing to general housing outside the interests of its own workers. Other tech companies are pursuing similar schemes, particularly Microsoft ($500m) and Amazon (free buildings for homeless) in Seattle.

Given its huge presence in Dublin, and the similar effect tech companies are having on housing prices here, would Google consider something like its US housing plan here?

"It's something we would think about doing over time," he says. "The [San Francisco] Bay Area is obviously the first place we started with housing. But it makes sense for us as a company to do it and it's also the right thing to do. It's important that there is value back to the community."

Does this mean that Google has imminent plans for Dublin on the matter?

"I think it will be a process of engagement rather than us just deciding what to do," he says.

"It's not just what companies need to do, even though that's important. There's got to be support from the government too, in terms of development and planning matters. And so the whole thing goes together. We do want to engage with the community and do what is right as a company. We are committed to Ireland."

Infrastructurally, Google now dominates part of the South Docklands, owning and developing a number of large buildings in the area. The company sees its Dublin footprint as more than just a collection of offices and wants to add lifestyle features, potentially apartments, shops and restaurants. "I think being part of Dublin, for us, means it's important that we get our development right in a way that works for the community," says Pichai.

"Things like housing are issues we care about. I think we are in the early stages here. It's a balance on how to get this right."

Pichai says a commitment to housing is one expression of "good corporate citizenship" in a community. "If you look at Silicon Valley in the past, specifically companies like Hewlett Packard and its founders, they invested a lot in the communities around them," he says. "And so I think that's what led to much of the sustainable development back then. We've gone through a few years of hyper-growth. Maybe that sees things fall behind. So I think it has to go hand in hand."

Other than the possibility of building houses for rent-challenged workers in Dublin, Pichai has some sizeable issues to consider for his company. Google is now ubiquitous. Whether it's search, YouTube, Gmail or any of its other services, hardly anyone can get through a day without needing a Google product.

With such great power and influence comes extra scrutiny and responsibility. And Google has attracted plenty of it, especially in Europe.

With the exception of Apple's disputed €13bn tax issue, no company comes close to Google in the scale of fines imposed on it within the European Union of late: almost €10bn in the last three years. Overseen by the tough European competition commissioner, Margrethe Vestager, the fines have mostly been for abuse of Google's dominant position, such as online ads, shopping services and Android.

In Washington and Silicon Valley, these fines have often been received angrily with high-profile senators and tech executives accusing the EU of 'not getting' innovation culture and wrongly fining firms like Google because they're American.

For the most part, Google has strongly disagreed with the EU fines. But does Pichai share a view that they are rooted in a European lack of appreciation for innovation or that there is a clash of culture?

"I definitely don't see it that way," he says. "Sometimes we disagree with certain aspects, yes. But I think the European Commission, rightfully, is looking out for EU citizens. And sometimes they judge certain things differently [to us]. But I don't view it as a clash of cultures. A large company deserves scrutiny. In some cases, we need clarity as a large company on which way to operate give that we are trying to build products for our users in a way that benefits them. So I view these as robust discussions, but I think it's an inherent process of a democratic society."

GDPR, he says, is an example where the EU has had a significant global impact.

"With GDPR, I do think they've tried to write the regulation while understanding that there is innovation happening," he says. "There's a lot of thought that went into it and it has been an important piece of regulation around privacy."

The EU isn't Google's only regulatory concern. It may be getting too big. In the US, only three companies - Microsoft, Apple and Amazon, all tech firms - are bigger. The search giant is more than twice the size of Facebook, almost 10 times the size of Net-flix and some 50 times larger than Twitter.

In Europe, it has a monopoly on search at more than 90pc and is close to that in the US. It also rules online video through its YouTube subsidiary.

Outside China - where it is blocked - no one else looks remotely likely to compete with it in its strongest categories.

This has led to increased calls in the US for a break-up of the firm, in a similar way to the Bell system in 1982 or Standard Oil in 1911. Those calling for this include the front-running Democratic presidential candidate Elizabeth Warren. Proponents of a break-up argue that breaking up goliaths such as Google and Facebook is the only way to check their unprecedented power.

Does Pichai fear such a thing happening?

"I take a long-term view of it," he says. "If society collectively says that something has to be done this way, or that the current system is not the right way to do it, well, you know, we'll have to adapt to it. So I take it with that long-term view in mind. I don't have a specific opinion on it. It's got to be a collective conversation, it's not up to us."

Back in Dublin, Pichai spent time last week at St Patrick's primary school in Ringsend to launch a €1m initiative with children's charity Barnardo's around online safety. The scheme is to help kids understand the dangers of engaging online and how to behave responsibly themselves.

Pichai has a cautious approach to his own two kids going online. But is he the kind of tech boss who builds online services but stops his own kids using them?

"My kids do have access to devices, but I delayed it as much as I could," he says.

"I struggle with it the same way every parent does, particularly as to how much is OK. I do see the good that comes with [an online screen], although I worry whether they're using it too much. But I also think it's important that they become comfortable with it. I think their lives will involve the use of a lot of technology. So you can't hold them back completely."

€10bn cost of Google’s battle with authority – and there is probably more still to come

In the last three years alone, Google has been hit with almost €10bn in penalties, including a whopping €8.2bn in separate fines to the European Commission.

This includes €1.5bn in March for abusing a dominant position in online search ads, €4.3bn last year for abusing its Android mobile operating system and €2.4bn in 2017 for unfairly promoting its own comparison shopping service.

It's probably not over, with a new probe being signalled this month by competition commissioner Margrethe Vestager into whether Google has been favouring its own job search tool over smaller rivals. Vestager has criticised Google as being "both player and referee".

The most recent outlay was a €1bn settlement in France last week in a case in which Google was accused of not declaring some activities in France but instead in Ireland, where it books its sales.

8,000 staff and a magnet drawing in other tech firms

Google is one of Ireland's biggest industrial employers, with 8,000 people working for the technology giant in Dublin.

Senior figures in government and the IDA say that it is the most important foreign investor in the capital because its presence has attracted hundreds of other web-focused firms. It is also a high salary employer, with annual accounts indicating that many staff earn more than €100,000.

The Dublin office handles sales, finance and engineering, as well as other functions.

It is considered to be a high-end support office, although it also contributes to design projects and has a central role in managing Google's data centres.

Irish Independent

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