Margrethe Vestager is preparing for her second consecutive term as Commissioner for Competition of the European Union, a rarity in the context of European institutions where usually most of the posts are assigned to new politicians at the time of the renewal of the Commission . With his courteous, at times a little brisk manner, in the last five years Vestager has not spared criticism and billionaire fines to some of the largest US technology companies, earning the respect of most European politicians and the fears of powerful companies. like Google, Apple and Facebook. In the next five years, the Commissioner will have even more powers and could influence, like few others, the evolution of one of the richest sectors of the world economy, which in fact determines our ability to inform and be informed.
Fifty-one years old, Danish and belonging to the social-liberal party of the center “Sinistra Radicale”, Vestager made herself known in her years as Commissioner for Competition thanks to multi-billion fines. The measures against Google for abuse of dominant position and damage to free competition reached a total of over 8 billion euros, while Apple received a fine of about 13 billion euros on charges of circumventing the payment of taxes. in Europe. Both companies have appealed, asking for a review of the fines by the European judges.
In a recent interview granted to the New York Times, Vestager explained that in recent years the trust of users towards of the big platforms has dropped significantly, giving them the opportunity to take a much tougher approach to them. Facebook, for example, is still trying to rebuild its reputation after the Cambridge Analytica case, which involved the violation of the privacy of millions of people, and for actually favoring the spread of fake news and Russian interference during the presidential elections.
During the process of approving her new appointment to the European Parliament, Vestager presented a plan for the next five years as Commissioner for Competition, keeping Internet companies as the first objective. Among the proposals are: the removal of some protection systems that exempt large platforms from responsibility for the content posted by users, new mechanisms to make Internet companies pay taxes in Europe without circumventing them with various tax ploys. type and more in-depth investigations on the advantages exploited by companies to block the way for their competitors.
Vestager has also committed to address the issue of artificial intelligence, proposing to the European Union to adopt rules clear for the development and exploitation of these technologies, preventing them from spiraling out of control before being regulated (a concern shared by many industry experts). Among its proposals there is also a plan to offer greater guarantees to new jobs that have emerged with the spread of services via app, such as Uber drivers and Deliveroo's delivery drivers.
Over the next five years, Vestager will mainly continue to deal with large US platforms and their activities, often in substantial monopoly regime: Google is the most used search engine in a large part of the European Union, Facebook is the most popular social network by European countries and at the same time check Instagram and WhatsApp, the most used services for sharing images and for exchanging messages in Europe. As in many other parts of the world, in the European Union the dominant position of a company in a sector is not illegal, but it becomes illegal when the company exploits its condition to harm its competitors. In several cases, Vestager has identified this circumstance by launching investigations that have then resulted in billion-dollar fines.
At the end of the previous mandate, Vestager had launched an investigation – still ongoing – against Amazon, another major US company that produces a lot of business in Europe in the online commerce sector. The suspicion is that Amazon has policies that actually give it an advantage over its competitors, preventing them from expanding and becoming competitive enough. Vestager has also launched investigations against Apple and Facebook for similar reasons, which could lead to new measures in the future.
The plans for the new mandate are quite ambitious, but Vestager will only be able to carry them out if it receives the right support from the new European Commission and other institutions. If you look at the declarations of intent and the orientations of the governments of some of the larger member states, Vestager seems to have a good chance.
Ursula von der Leyen, the new president of the European Commission, has more occasions talked about the need for the European Union to have its own “technological sovereignty”, reducing dependence on US companies. The issue has been debated for years, but so far it has not led to concrete results: almost all the major platforms are American and have developed their services in a legislative context other than the European one, with fewer constraints for privacy and competition, considered a obstacle to growth in the technology sector. This meant that US companies grew rapidly, to the point of having dimensions and competitive advantages difficult to fill, especially for European startups that have to deal with a much more fragmented market than the US one.
For about two years, French President Emmanuel Macron has been proposing initiatives and plans to overturn the situation, asking that the European Union itself offer incentives and resources to startups to emerge and deal with large platforms. However, the funding must be included in plans shared between member states and organized in such a way that it does not constitute state aid. The European Investment Bank, the financial institution for financing activities in the European Union, has participated in several plans for startups, but without appreciable results.
The fear of some analysts is that a too harsh approach by Vestager and the new Commission to limit the intrusiveness of US companies could backfire on European companies and startups. Something similar has happened in recent years with the new privacy regulation (GDPR) which came into force in the European Union: according to experts it is among the best in the world for the protection of user data, but has involved the application of rules and costly technological changes that the large and rich US platforms have been able to deal with without problems, unlike the smaller European companies with fewer economic resources.
The rules and measures on competition decided by the European Commission they naturally apply to both European and non-EU companies, but it cannot be hidden that some are designed primarily to reduce the influence of US platforms. Sometimes regarded as protectionist measures, these measures complicate relations with the United States, at a time when diplomatic relations are already made difficult by the presidency of Donald Trump, who is prone to imposing tariffs as demonstrated by the so-called “trade war” against China. .
And Trump is one of the most critical of Vestager; last June he said in an interview that: “He hates the United States, perhaps more than any other person I've ever met.” Vestager sarcastically commented: “Since I know very well the relationship I have with the United States, he must have only met people who really like the United States very much, if they are the one who likes it least “.
In reality, the initiatives carried out by Vestager have had a certain influence in the politics of states United, at a time when both Republicans and Democrats want to reduce – for different reasons – the great power accumulated in recent years by Google, Facebook, Amazon and others. The orientation, also shared by many attorneys general, is to move quickly with the investigations, in order to implement structural changes and not just billion-dollar fines. Regarding speed, the European Union has partly failed: the investigations took years to conduct, leaving the companies involved time to reorganize and stem the outcomes of the decisions taken on their activities. The sense of urgency in the United States is heightened by the current political situation and the upcoming presidential elections of 2020, in order not to repeat the mistakes of the previous elections.
Vestager admitted that in some circumstances the European Commission has is moving slowly, but believes that during the new mandate, things could be different. In part, he had already demonstrated this in the last period of his first mandate, applying some “interim measures” to force companies to stop practices deemed improper, waiting for the investigations against them to be complete. This solution usually pushes companies to be more collaborative, also because it can lead to less expensive fines.
As a Commissioner, Vestager will also play an important role in the debate that is opening up on the so-called “Digital Services Act ”, a new set of rules that the European Union wants to approve to better regulate some aspects of the Internet, updating rules that are outdated and no longer suitable for the current context. Among the most discussed issues is the possibility of imposing fines and penalties on large platforms that do not remove illicit materials from their services. Vestager above all has in mind Facebook, the social network through which millions of people are kept informed: it believes that the company is not doing enough to prevent the spread of false news, violent content and hateful messages: “You have to put them offline because yes they spread like a virus. But if it is not done with the right speed, it becomes necessary to impose new rules “.
As regards unfair and competitive practices in the online sales sector, attention has been focused on the last period on Amazon and Apple. The first is under investigation to see if it has applied systems to penalize independent sellers on its platform, in order to take advantage of the sales it manages directly. On Apple, on the other hand, there are suspicions about the way it organizes content within the App Store to benefit its apps (linked to subscription services) over those of the competition. Spotify, for example, accuses Apple of favoring its Music service, showing it more frequently in its App Store.
Vestager explained to the New York Times that these two cases are emblematic of a dynamic that interests several large companies and their services: “Some of these platforms have both the role of player and referee, do you think it is correct? You would never accept a football match where a team is also the referee “.
During the first years of Vestager's mandate, the platforms affected by investigations and fines have almost always maintained a conciliatory tone with the European Commission, saying they want to work together to solve the problems and with the hope of obtaining a revision of their billion-dollar fines. Google, which could be forced to pay more than 8 billion euros, has sought the path of collaboration, although in some cases its executives have used rather critical tones to comment on the measures against them. Apple CEO Tim Cook, usually measured and mild-mannered, has gone a little further by calling a “total political crap” the fine against his company for failing to pay billions of taxes in Europe, made possible by policies. very advantageous taxes adopted by Ireland until a few years ago.
In addition to having enormous economic resources and powerful networks of influence, the big platforms have another not insignificant fact on their side: their services appeal to users and are used by hundreds of millions of people in Europe, as in the rest of the world. They know that rules and limitations cannot go beyond a certain point, however because European politicians would risk losing consensus, and try to exploit this advantage to counterbalance the antitrust initiatives that concern them.
Vestager however believes that the European Union should better define a coordinated approach to the development of 'economy born with the Internet, a sort of third way compared to the super liberal one of the United States and the statist one carried out in China: “Market forces are welcome, but we will not let market forces have the last word : the markets are not perfect “.
