By: Tom Verdonk
On September 10, the President-elect of the European Commission, Ursula von der Leyen, announced that Danish Commissioner Margrethe Vestager would reprise her role as European Commissioner for Competition for a second five-year term. Vestager has held this post since November 2014. After a subsequent hearing without any noteworthy opposition in front of Members of the European Parliament, Vestager obtained the Parliament’s approval. Her re-appointment in itself is unique: No Commissioner has ever been reappointed to the same role for a second term. Moreover, Vestager’s second term is likely to have a significant impact on antitrust enforcement in the European Union (EU), in particular with regard to the tech sector.
Officially, Von der Leyen’s Commission was supposed to take office on November 1. The new Commission’s first day in office, however, was delayed after parliamentarians rejected 3 out of Von der Leyen’s 27 appointees. After new Commissioners were selected and subsequently confirmed by the European Parliament, Von der Leyen’s Commission eventually took office on December 1.
Far less controversial was Vestager’s nomination. In January 2018, she expressed her interest in continuing in her role, though her name initially emerged as a candidate to succeed Juncker as Commission President. In addition to being confirmed as Commissioner for Competition, Vestager has also been appointed as Executive Vice-President for ‘a Europe fit for the digital age’. Her nomination to these positions is clearly seen as a reward for her achievements during her first term in the eyes of the EU’s political class.
While Vestager will remain in charge of antitrust enforcement, her Director-General (i.e. someone who heads a Directorate-General, or policy department, such as the Directorate-General for Competition, and reports to the politically responsible Commissioner) will not stay in Brussels. Effective September 1, Johannes Laitenberger has been appointed a judge at the General Court in Luxembourg. This provides an opportunity for Vestager to start her second term with a new Director-General.
Vestager will not only be responsible for antitrust enforcement in the EU, but her role as Executive Vice-President also entails responsibility to “ensure that Europe makes the most of the enormous potential of the digital age.” According to the Commission, her role as Executive Vice-President and her role as antitrust enforcer are complimentary. Since competition policy is a vital element for the creation of a well-functioning Single Market in the EU (i.e. one territory without any internal borders or obstacles to the free movement of goods, capital, services, and persons), Vestager’s competition policy as well as other policy initiatives could help in “strengthening EU’s industry and innovation capacity, as well as its technological leadership and strategic autonomy.” These initiatives will clearly build on the EU’s policy priority to create a Digital Single Market, introduced by the Juncker Commission and led by Vice-President and European Commissioner for Digital Single Market Andrus Ansip. This policy brought together Commissioners with related policy areas within a single cluster, and included Commissioner Vestager.
Over the past five years, Vestager earned a reputation as a tough tech industry watchdog – even being named the “most powerful regulator of Big Tech on the planet”. Probes into several tech giants and subsequent decisions like fining Google more than $9 billion for breaking antitrust laws and forcing Apple to pay about $14.5 billion for dodging taxes in violation of state aid rules earned her praise among Big Tech critics, but also attacks. Accusations of specifically targeting U.S. companies through antitrust actions often arise. When speaking to President Juncker, President Trump famously referred to Vestager as “your tax lady” who “really hates the U.S.” Vestager responded by telling reporters “I’ve done my own fact-checking on the first part of that sentence, and I do work with tax and I am a woman, so this is 100 percent correct.” She disagreed with the second sentence: “I very much like the U.S.”
Despite these criticisms, Vestager’s hearing at the European Parliament made it clear that she would not divert from her first term’s approach. “In the last five years, I’ve seen how enforcing competition rules can make markets work for people, not the other way round,” she noted, adding that she was deeply honored to be able to continue her work. Although the Commission underlined the complementary nature of the two policy areas, her new dual role could play into the hands of her critics. Being a neutral competition law enforcer on one hand, and serving as a pro-European technology industry advocate on the other could create a conflict of interest. During her hearing, Vestager tried to reassure Members of the European Parliament about this concern. She emphasized, for example, that “independence in law enforcement is non-negotiable” and referred to the various checks and balances within the Commission’s antitrust enforcement process. It remains to be seen, however, whether non-European tech firms are, likewise, reassured by these words.
Either way, Commissioner Vestager continues to take steps impacting the technology sector. In a rare move, the Commission imposed interim measures on Broadcom, ordering the firm to stop applying certain potentially anticompetitive provisions in the supply of chipsets for TV set-top boxes and modems. At the same time, she also made clear that she is not necessarily in favor of breaking up tech giants, noting: “From a competition point of view, you would have to do something that breaking up the company was the only solution to the illegal behavior, to the damage. And we don’t have that kind of case right now.” Accordingly, breaking up companies would be an instrument of last resort, yet seems to remain an option.
Nevertheless, American tech firms may find some comfort in Vestager’s words during her hearing. Referring to China and the lack of reciprocity between the Chinese and European markets, Vestager said to Members of the European Parliament: “We invite people to come and do business and we are not invited back. And where I come from, if you’re not invited back, well then you stop inviting people.” In her view, the public procurement market in Europe, encompassing 14-15% of European GDP or 2 trillion euros, could serve as a powerful bargain in trade negotiations with China.
Shifting the focus from the U.S. to China may not only please American tech companies, but would also align with the actions and rhetoric of the current US administration. And perhaps as Commissioner Vestager enters her second term, such developments could even improve President Trump’s opinion of Europe’s “tax lady.”