Margrethe Vestager Is Still Coming for Big Tech
The coronavirus pandemic has made the world more reliant on technology. The EU’s competition commissioner says that makes her fight more urgent.
Antitrust regulators are rarely well known outside of trade lobbies and industry circles. Not so Denmark’s Margrethe Vestager, who may be the world’s most famous corporate umpire. The European Union’s competition commissioner, who began an unprecedented second term last November, is something of a global celebrity: She’s a sought-after speaker, a female icon, and the person seen as most likely to rein in the unfettered dominance of the world’s biggest technology firms.
Vestager has made news with the huge fines for anti-competitive behavior she has leveled at companies such as Google and Apple. But those punitive measures were limited to Vestager’s jurisdiction—the common European market—and represent only minor stumbles for the world’s most powerful corporations. That’s why Vestager is redoubling her efforts and hoping other countries will follow her lead.
Foreign Policy’s Ravi Agrawal recently spoke with the Brussels-based Vestager about the future of regulation and competition in technology—and how the pandemic may have the strange effect of boosting her mission.
Foreign Policy: I’ll start with an easy question. How has the coronavirus pandemic affected your work?
Margrethe Vestager: I have been busier than ever before. It has been very intense. Of course, this is nothing compared to all the people who are working in hospitals and saving lives. But from the moment we realized the enormous effects of the lockdown, we knew we had to make sure that first aid is available fast and that it’s managed in such a way that our single market doesn’t become completely fragmented.
FP: Despite the historic job losses caused by the pandemic, the world’s biggest tech firms all seem to be performing strongly in the stock market and further entrenching their market dominance. Does that worry you?
MV: Well, it makes the regulatory approaches that we were considering even more urgent. Because we have now had a crash course, a full-scale experiment, in doing everything digitally: remote working, learning, socializing, even exercising. We see all the benefits that come with digital technologies. But the downsides are clearer now too. And that is a huge driver to make sure that a digital world is based on fairness and market access. We are pushing even more strongly now on the things we were already working on. We have ongoing investigations—some preliminary, some more advanced—into Amazon, Google, Facebook, and Apple. We have this sense of urgency to make sure that the innovative potential of digital technologies can be fulfilled and that we still have an open market where one can have a go at it.
FP: There are all these theories about how the pandemic will change the world. What do you think it means for Big Tech and the fight to regulate it, not just in Europe but globally?
MV: We now see so clearly how much digital technologies will be an integrated part of every aspect of our lives, that if anyone doubted the need to make sure that we have the right regulatory framework on technology, they must now be convinced that you cannot have a laissez-faire approach to something that’s so involved in everything we do. I think that what was there already—a nascent public feeling in favor of regulation—is now growing and maturing much faster than it would otherwise have done.
FP:But this could go two ways. One is that the pandemic boosts the appetite for regulation, but the other is that we could all become so much more reliant on some technologies and strengthen the market dominance of a few giant firms.
MV: I tend to think the first scenario is more likely. You do not want to depend on someone who holds a lot of market power because you would want to have choice. You would want to have openings for newcomers. All of us now have experience with several ways of remote working—Skype, Webex, Zoom, and so on—and I find it quite intriguing to see the different facilities and really appreciate that there is choice. One product suits one situation; another product suits another situation. We would be served quite poorly if there were no choice.
FP:While you have been lauded for fining companies such as Google and Apple for their antitrust and anti-competitive behavior, critics say those punishments are the equivalent of a mere parking ticket.
MV: Yes. Our work here is still a work in progress. In these individual cases, the fine is a punishment for past illegal behavior. The second element in such a decision is a cease-and-desist order. And then we have the third element, which is a more restorative approach. Because what we have seen in Google’s case is that even when the illegal behavior stops, that doesn’t necessarily open the markets. Once you own a particular market, it takes a lot of effort to open that market for competitors. And this is why we also need a regulatory approach. We need to spell out more clearly to big digital gatekeepers that there are explicit dos and don’ts, and one of the obvious don’ts could be that you cannot promote yourself if you are a digital gatekeeper.
FP: You’re in Brussels, but the world’s biggest tech firms are in the United States. Newer tech giants are emerging in Asia. Your role gives you power to regulate and fine companies for their business in Europe but not the rest of the world. Is there a way for countries to collaborate more on regulation and antitrust law?
MV: Yes, I definitely think so. The interest in and the momentum of this cooperation is increasing. We have what we call the International Competition Network, where we discuss things like this. We have the General Data Protection Regulation [or GDPR, a landmark EU regulation on data protection and privacy]. And we also conduct outreach. For instance, the European Commission was in Addis Ababa to meet with the African Union Commission, and officials there were extremely interested in how to deal with privacy, competition, and making sure that markets are contestable. I think there is a very strong interest in these matters and an openness to not necessarily copy but to take inspiration as to what is needed to make sure that national and regional businesses get a fair chance in these markets.
FP:How do you feel about companies such as Apple and Google creating contact-tracing apps?
MV: For me, the fundamental thing to look at is not the company but the behavior of the company. No matter who develops a virus-tracking app, what is very important is that it comes with an open protocol that third parties can verify—and ensure that the app is not doing anything other than what it is said to be doing. And a decentralized system is ideal. But transparency is the main thing here. And of course, that companies enable the phones to work with different apps and across borders and operating systems. Otherwise these apps will not be useful.
FP:Should surveillance be left to companies or countries? South Korea’s Corona 100m app, for example, alerts users if they are within 100 meters of a coronavirus patient, but it has been criticized for being cavalier with patients’ data. In India, the Aarogya Setu app has been downloaded by 120 million people, but that’s mostly because the government made it mandatory. Obviously, neither of those cases are under your jurisdiction, but what do you make of them?
MV: What has been important for us—and that in itself has been quite challenging—is for the European member states to come together on one approach. And that is slowly but surely happening. The more you can have a coordinated approach, the easier it is to make sure that different apps can work together. For us, the fundamental thing here has been whether or not people would trust the technology. Obviously it would have to be voluntary whether you would download such an app or not, and you would only make that choice if you trusted the technology to do what it says and nothing else—that it would respect your privacy. And this is very important for us because, just before the pandemic, we launched a European strategy on data and a white paper on artificial intelligence, and the main takeaway here is to say we really believe in the benefits of digital technologies but only if we can trust these technologies to serve humans—and not just a few humans and not just a few companies. My guess is, because we can see how the GDPR has inspired other countries to take up similar measures, that citizens all around the world have a preoccupation with being able to trust their apps and what they do. People don’t want to be part of the launch of a surveillance society for the next generation.
FP:In many of your public speeches and interviews, you often talk about the concept of trust in society. In your 2017 TED Talk, for example, you described how a lack of trust in the market can lead to wider social dissatisfaction. Do you think that people should put their trust in these companies’ intentions?
MV: This is my sixth year as a law enforcer, and I see so many businesses that really make an effort to do things by the book and that struggle to innovate and to present the best possible service to their customers. And then I see a few companies—some that are returning customers where we keep receiving complaints—and we keep finding issues that give us reason to hand out big fines. I see both sides of this. I have a mixed feeling about this question because I also see the many good things and many companies that I would never have an issue with.
FP:You have expressed concern about Chinese companies taking over European ones, especially amid the pandemic, but your concern is primarily based on the notion that it may be unfair competition if the Chinese company is state-backed. But aren’t those lines, in China and in other countries, murky? And if so, how do you deal with that?
MV: We’ve reassessed our relationship with China and basically retired the idea that China is a developing economy. China is in some areas a partner, for instance when it comes to fighting climate change, but also a strategic competitor. And that has been informing a lot of the work that we’ve been doing. We’re in the process of finalizing a white paper on how to deal with foreign subsidiaries, both when it comes to reciprocity in market access and how to deal with state-owned or state-backed companies acquiring businesses within the single market. We felt a strong need to step up and act where we found a risk of unfair competition. The worry we have on acquisitions now is that there is a risk of a staggered global recovery. If some regions of the world recover faster than others, then there is the chance that some may think they should take advantage of it. We are very vigilant when it comes to that kind of risk.
This conversation has been condensed and edited for publication.
This article appears in the Summer 2020 print issue.
Ravi Agrawal is the editor in chief of Foreign Policy. Twitter: @RaviReports