Europe’s designated cartel chief introduces its program for the next five years

Europe’s designated cartel chief introduces its program for the next five years

Brussels, 13.10.2019

Margarethe Vestager will play a dual role in the next Commission: she will remain the Competition Commissioner and will also take on the post of Executive Vice-President. It was recently available to members of four committees in the European Parliament for three hours. MEPs seized the opportunity to hear about their priorities for a broader EU-wide digital strategy for the next five years.

However, two questions immediately came up: Are there any conflicts of interest between their offices? Is there not tension between „objective competition and industrial interests in your portfolio?“

Vestager replied that these were the first questions she had asked herself. „It has always been true that the Competition Commissioner is part of the College. And every decision we make in competition is a collegial decision, „she said. Each decision will therefore be subject to a double legal review. „The final confirmation of this construction was two judgments in 2011 – which examined whether this structure … is consistent with our human rights, and that turned out to be correct. The setup as such is as it should be. „

The Commissioner-designate subsequently answered a large number of questions. For example: digital taxation, AI and data ethics, digital skills and research or regulation and financing of small businesses. It was agreed that climate change and digital transformation are two of Europe’s biggest challenges.

Vestager did not hesitate to present the positive aspects of its field of action: „Europe is full of highly qualified people, we have an excellent infrastructure, fair and effective laws. Our internal market gives European companies the opportunity to grow, innovate and be the best in the world, „she told MEPs.“ So my promise is not to make Europe more like China or America. My promise is to help make Europe more like itself. To build on our own strengths and values, our society is both strong and fair. For all Europeans. „

In her opening statement, Vestager emphasized that if confirmed, she will work to build trust in digital services. It suggests that regulation of the way companies collect, use and share data may be required to ensure that people’s data is used for the common good rather than pooling market power. It’s a suggestion that has not gone unnoticed in Silicon Valley.

„I will work on a law on digital services that includes updating our liability and security rules for digital platforms, services and products,“ she promised. „As global competition keeps getting harder, we need to make more effort to ensure a level playing field,“ she warned as well.

During the hearing, Vestager was asked if Europe’s response to the power of the platforms could be to smash superior technology giants? Vestager commented that such an intervention should only be used as a last resort. She pleaded for less drastic measures at first.

Vestager cited Google AdSense’s antitrust case as an example of enforcement that was unsuccessful because competition could not be restored. „Some of the things we’re going to investigate, of course, is that we need more resources to drive competition in these markets,“ she said. „They have stopped their behavior. That was two years ago. The market has not risen. What do we do in such cases? We need to consider more far-reaching remedies. „

While there is an opportunity to smash a company, this is a very far-reaching measure. „My commitment is to make sure that we do the least intrusive things to compete. And in that respect, of course, I am ready to investigate what we need more in competition cases so that the competition returns. „

Their main message seemed to be to use the existing antitrust laws, but to do so with greater speed and agility. As an example, she cited the recent interim measures against chipmaker Broadcom. „It is a good reflection of the fact that it is a very high priority for us to speed up our work,“ she said, adding: „There is a limit to the speed with which law enforcement agencies can work, since we are at one On the other hand, we should be able to work as fast as we can. „

„Of course, one could think about what kind of tools we need,“ she said, talking about market reorganization as a means to regulate platform power. „[There are] different ways to reorganize a market if the competition authority believes that its functioning does not favor fair competition. And these are tools that can be considered to reorganize before damage is done. Then you do not punish because no violation is detected, but you can almost directly issue orders … how to organize a market. „

In terms of artificial intelligence, Vestager promised to publish proposals that „ensure that AI is used ethically to support and not undermine human choices. „She wants to achieve that during her first 100 days in office.

Europe could set itself apart from others – and be „world leader“ – by developing „one-purpose AI“, suggested Vestager, pointing out potential applications for technology, such as healthcare, transport and combating the Climate change further European values.

„I do not think we can be world leaders without ethical guidelines,“ she said about AI. „I think we’ll lose it if we say ’no‘, let’s summarize all the data, no matter where they come from, and invest all our money, I think we’ll lose because the AI ​​you are because you want to serve people, that’s a different kind of AI, that’s AI for a purpose. „

On digital taxation, where Vestager will play a strategic role in cooperation with other Commissioners, it wishes to seek a global agreement on regulatory reform to take account of cross-border data and profit flows. However, if this is not possible, she said Europe is ready to act alone and quickly by the end of 2020.

„Surprising things can happen,“ she said, discussing the challenge of achieving an EU-wide consensus on tax reform, and how many tax laws have already been passed unanimously in the European Council. „So it can not be reversed, the problem is that we have some very important laws that have not yet been passed“.

„I am still confident that we can achieve a global agreement on digital taxation.“ If not, we will of course propose and promote a European solution. And I admire the Member States who said we want a European or global solution, but if that is not the case, we are ready to do it ourselves to answer all the companies that pay their taxes. „

Mr Vestager also called for consideration of the possibility of amending Article 116 of the Treaty on the Functioning of the EU, which refers to competitive distortions of the internal market in order to adopt the tax reform by qualified majority rather than by unanimity as a potential strategy to overcome the current blockades of the EU for tax reforms.

„I think we should definitely investigate what that would bring,“ she answered a follow-up question. „I do not think this will be successful, but it is important that we use the various tools that the contract gives us and use those tools when needed.“

During the hearing, she also advocated more strategic use of public procurement by the EU and Member States to increase funding for digital research and business innovation for the benefit of common interests and priorities.

„It means working with Member States on important projects of common European interest. We will bring together entire value chains, from universities, suppliers, manufacturers, to those that recycle the raw material used for manufacturing, „she said.

„Public procurement in Europe is … a lot of money,“ she added. „And if we use that to ask for solutions, we may also have smaller companies to say that I can actually do that. In this way, we can develop an artificial intelligence strategy that involves all areas of society. „

She also argued that Europe’s industrial strategy must go beyond its own internal market – a tougher concept of market access for those outside the bloc.

And that means that it may be less accessible to all when accessing publicly-funded data – if its value runs the risk of further anchoring data-rich, dominant giants at the expense of smaller local players.

„As networking grows we are more dependent and affected by the decisions of others. Europe is the largest trading partner of some 80 countries, including China and the United States. Therefore, we are in a strong position to work for equal global competitive conditions. This includes the continuation of our proposal to reform the World Trade Organization. This includes getting the right tools to ensure that foreign ownership and subsidies do not compromise fair competition in Europe, „she said.

„We need to find out what constitutes market power,“ she continued, discussing how the ability to capture data can influence market position, whether directly related to sales. „We will expand our insights on how this works. We have learned a lot from a few merger cases to find out how data can act as an asset for innovation as well as an entry barrier. Because if you do not have the right data, it’s very difficult to create the services customers really ask for. And that is becoming more and more important when it comes to AI. Because once you have it, you can do more.