The EU’s competition chief Margrethe Vestager is arguably doing more to curtail the power of American tech giants than anyone else on the planet.
In recent months, she has levied a multi-million and multi-billion euro fine against Facebook and Google respectively, and ordered Ireland to collect billions of euros of tax from Apple.
These decisions have not proved popular across the Atlantic. Apple’s CEO Tim Cook described Vestager’s ruling as “total political crap” and enlisted the support of the Trump administration in the company’s appeal.
But today, in a speech at Web Summit – Europe’s biggest technology conference – Vestager hit back at her detractors, launching an impassioned defence of the EU’s competition law. Here are the key talking points.
The EU’s €2.42bn fine against Google will “drive forward” competition
Vestager began with a story about two AI sumo wrestlers learning to wrestle. They had picks up the skills of the sport not by being taught, but by competing with each other: “That is what competition does. It makes us learn,” she said. “It makes us do something we didn’t imagine we could do beforehand. And that means it is a problem when powerful companies which dominate the market decide to use their power to close down competition because that can end up closing the door to innovation.”
Moments later, Vestager turned her attention to Google: “When Google discovered that its comparison shopping service wasn’t doing very well, [it] was free to compete by improving its services. It was their choice to do so. But they did something else. […] It started to show its own comparison shopping service at the top of the first page of search results, while demoting rivals so on average they only appeared on page four. […] That comes in the way of innovation.”
She added that the decision to fine Google €2.42bn for the alleged breach of competition law would “drive [competition] forward”: “Competition law enforcement can help show that no company is above the law. No company has the right to close down competition to disable the innovation of each and every one of you.”
“If data does become an obstacle to competition, we’ll be there”
Vestager reminded the audience that the EU approved Microsoft’s acquisition of LinkedIn for $26.2bn last year. But she warned that the commission would be vigilant to companies that seek to undermine competition by hoarding data: “If data does become an obstacle to competition, we’ll be there and we will try to do our best to stop it to allow for competition.”
Governments warned against giving companies “selective tax treatment”
It’s not just businesses that have fallen foul of competition rules in recent months. The EU is taking Ireland to court over its failure to collect 13 billion euros from Apple after it was accused of giving the company special tax treatment. Vestager didn’t name the case, but instead criticised all governments that give select companies fiscal advantages:
“When a government gives a special selective tax treatment to just a few companies – selective treatment that is not available to the huge majority of businesses that just pay their taxes – well that makes it more difficult to compete on equal terms. That’s why we have taken action against selective tax benefits, to make sure that not just most companies pay their taxes, but that all companies pay their taxes.”