Double-hatted Vestager must tread carefully between new powers and old

14 September 2019 10:54am

10 September 2019 by Lewis Croft and Nicholas Hirst

EU competition commissioners have traditionally stood alone, maintaining a healthy distance from the business of policymaking as they wield the sweeping quasi-judicial powers that set them apart from their peers.

No longer. The European Commission’s incoming president Ursula von der Leyen proposed to give Margrethe Vestager broad political responsibilities covering the digital sector, while keeping her in the competition role for a second full term. Both elements of that equation are novelties in the EU’s recent history.

The decision is likely to trigger criticism. How can a dispassionate enforcer also be responsible for political decision-making over new laws for the Internet, digital taxation policies and a strategy for small businesses?

Vestager told reporters outside the commission headquarte that she understood the concern over the sanctity of competition procedures.

“We have to make sure the integrity of our procedures is perfectly kept,” Vestager said. “We cannot take any risks on the case-work because that has to stand up in court.”

But that won’t stop companies and the lawyers who defend them from pouncing on any decision or process that is perceived to be unfair — or that mixes her old powers with the new ones.

Vestager is no stranger to that controversy, having spent a lot of her first mandate rejecting criticism that competition enforcement was politicized. And she has also long explained that the powers of investigation and the broader mandate to draft laws sit together in the administration as a whole: They are part of a joint solution to economic and industrial challenges.

For example, her staff probed Google’s powerful search engine for abusing its power while other EU officials drafted a complementary law that governed the transparency requirements of Internet platforms.

Similarly, Vestager grabbed headlines with cases against the likes of Apple and Starbucks over tax avoidance. Other commission departments, meanwhile, drafted laws on greater tax transparency or taxing digital services.

Centralized power

But uniting some of those powers in a single commissioner — rather than two separate ones — will have some companies querying whether the deck is being stacked against them.

“Might my case be used for broader regulatory purposes?” they might ask. “Will the investigation be dropped so they can draft a new regulation instead?”

US tech firms accused of harming competition will note that, as an “executive vice president,” Vestager is charged by Von der Leyen with helping European companies strengthen the continent’s “technological leadership and strategic autonomy.” That could undermine her neutrality in enforcing antitrust law, they might say.

Vestager, her predecessors and the European Commission have long been alert to this debate and often argued that competition enforcement exists alongside other tools to ensure markets remain open and fair.

And virtually every competition commissioner has been called on to both defend and update the procedural rulebook to ensure investigations that can lead to billion-euro fines are scrupulous and just.

Von der Leyen set out the rationale for giving Vestager two jobs at a press conference in Brussels on 10 September.

She said Vestager’s work in competition enforcement was “closely linked to the digital sector” and therefore her additional responsibilities formed an “absolutely perfect combination.”

But a stack of “mission letters” to the new commissioners, and a spread of dossiers such as artificial intelligence, innovation and data among other commissioners, means that it still unclear how Von der Leyen’s new-look college will work.

Any mis-step in marshalling political priorities while formal investigations are underway is sure to cause the president’s team a headache.