Margrethe Vestager has been re-appointed as Commissioner for Competition for a second term. If her appointment is approved by the European Parliament, as is expected, she would be in line for a combined 10-year term, which would make her the longest-serving Competition Commissioner. In addition to the competition portfolio, Ms. Vestager will also take on responsibility for the “a Europe fit for the digital age” agenda, and has been designated as one of the executive vice-presidents of the Commission.

High-profile cases likely to continue

During her first term, Commissioner Vestager drew attention in particular for bringing high-profile abuse of dominance cases against U.S. tech companies. The most well-known are perhaps the abuse of dominance cases against Google, where the Commission levied fines against Google totaling a record- breaking €8.2 billion for abusing its market dominance as a search engine, as well as its abusive practices regarding online advertising and Android mobile devices. During Vestager’s first term, the Commission also imposed fines totaling €1.2 billion on Qualcomm, one of which was for predatory pricing, a practice which the Commission has not penalized in over a decade.

There is also every indication that the Commissioner will continue to target perceived abusive practices in the tech sector using the full range of competition tools at her disposal. In a speech following her nomination, Ms. Vestager noted that “as competition authorities, we need to keep a close eye on the way that digital platforms deal with data [and] be prepared to take action if we find that they’re using their control of data to undermine competition.”[1] The Commission has recently opened separate antitrust probes into Amazon’s collection and use of sensitive data of third party sellers that use Amazon’s online marketplace, and Broadcom’s allegedly exclusionary practices on the market for TV and modern chipsets. It is also considering a probe into Libra, Facebook’s cryptocurrency,[2] and an investigation into Google’s practices in the online job-search market is rumored to be underway.[3] During her hearing at the European Parliament, Commissioner Vestager referred to the Google/AdSense case and said that despite Google stopping its behavior when the Commission issued a Statement of Objections (“SO”), “the market hasn’t picked up” and advocated for remedies that are “even stronger” and “much more far-reaching.”

Commissioner Vestager also gained a reputation for targeting selective tax deals struck by Member States with prominent international companies using state aid enforcement measures, a policy that has drawn the ire of the U.S. government for perceived anti-U.S. bias, and has led to several Member States accusing her of infringing national sovereignty on taxation matters. Notably, the Commission ordered several Member States to recover illegal state aid from (mostly U.S.) firms including Apple, Amazon, Starbucks, and Fiat. Most prominently, Ireland was ordered to recover €14.3 billion (€13.1 billion plus interest of €1.2 billion) of illegal tax benefits granted to Apple, which is by far the largest state aid recovery order the Commission has made.

In her second term, Ms. Vestager will seek to cement her legacy by defending appeals of her most high-profile decisions before the EU courts, including the Apple state aid decision and the Google and Qualcomm abuse of dominance decisions, which are currently pending before the General Court.

Pressure for reform of antitrust rules

Commissioner Vestager is likely to face pressure to reform the current antitrust framework during her new mandate. After the Commission blocked the Siemens/Alstom merger, despite significant political pressure to approve the deal, there were calls from the French and German governments to change EU antitrust rules to introduce greater flexibility, including the ability to consider factors such as European industrial policy (which may involve permitting or encouraging consolidation in the EU industry, and even the creation of “European champions,” to help stave off non-EU rivals, notably from China). Ms. Vestager has cautioned against such approach, noting that applying less stringent rules (e.g., considering markets to be worldwide in scope) would weaken the Commission’s ability to enforce competition rules, would likely have undermined its cases against Google, and would ultimately have a negative impact for EU consumers.[4] During her hearing at the European Parliament, Commissioner Vestager indicated that she stands by the Siemens/Alstom decision and reiterated the support for the current framework. This policy debate may come to a head when Germany takes up the six-month rotating presidency of the Council of the EU in July 2020.

Other aspects of EU antitrust legislation are also set to come under scrutiny. The Commission is already reviewing the current state aid rules with the intention of updating and aligning them with the new political priorities.[5] It will also have to evaluate the functioning of the Vertical Block Exemption Regulation,[6] which is due to expire during Commissioner Vestager’s second term. The Commission is also likely to reassess the guidelines for the assessment of horizontal cooperation agreements[7] that include e.g., rules on research and development “which play a key role in European competitiveness and the development of technology-driven markets.”[8] Finally, the Commission’s leniency program might need revisions to increase its attractiveness, as the number of leniency applications has been steadily declining in recent years.[9]

New digital policy agenda

In addition to her role as Competition Commissioner, Ms. Vestager will now also be in charge of setting EU policy in the digital sector—an appointment which has raised eyebrows in Silicon Valley, in particular in light of the tough line she has taken on tech companies in her first term. Ms. Vestager has already signaled that her policy will draw on the insights gained from the Commission’s antitrust enforcement when considering regulations for the digital sector. Speaking to the press on September 10, 2019 following her nomination, Ms. Vestager said that the Commission had gained “insight from specific cases” during her first term, noting that “in a number of cases … the case work itself cannot do it.” She predicted that these insights would lead the Commission to “consider more regulation.”[10] Ms. Vestager may seek to draw on the Commission’s experience in reducing interchange fees charged to merchants by Visa and MasterCard, which involved a series of fining and commitment decisions for breaches of competition rules, as well as the Interchange Fee Regulation, [11] which capped interchange fees across the EEA.

Ms. Vestager will share the EU digital policy agenda with the Commissioner for the internal market, France’s Sylvie Goulard, and one of their major tasks will be the preparation of the new Digital Services Act, which should set out rules for digital platforms, services and products. In particular, the legislation should clarify websites’ liability for published content, and subject algorithms used by big tech platforms to regulatory scrutiny.[12] In a further indication of the possible legislative agenda, Ms. Vestager pointed out that existing data protection rules do not prevent data from being used to “to undermine democracy,” a reference to the Facebook/ Cambridge Analytica scandal in 2018, and noted that “we may also need broader rules to make sure that the way companies collect and use data doesn’t harm the fundamental values of our society.”[13]

Conclusion and outlook

Commissioner Vestager’s first term has been largely perceived as progressive and bold, with that same trend set to continue in her second term. She is likely to retain her focus on big tech and platforms, and look carefully at their use of data, while complementing the competition enforcement toolkit with new rules for the digital sector.

It remains to be seen how Ms. Vestager will balance her two roles of overseeing competition enforcement and digital policy in the EU, but we can expect that after an anticipated 10-year term, she will leave a lasting imprint on the EU competitive landscape in general, and on competition in the digital sector in particular.

[1]      Margrethe Vestager, Security and trust in a digital world, Speech to CCBE Standing Committee, September 13, 2019, available at: https://ec.europa.eu/ commission/commissioners/2014-2019/vestager/announcements/security-and-trust-digital-world_en.

[2]      Bloomberg, Facebook’s Libra Currency Gets European Union Antitrust Scrutiny, August 20, 2019, available at: https://www.bloomberg.com/news/ articles/2019-08-20/facebook-s-libra-currency-gets-european-union-antitrust-scrutiny.

[3]      Reuters, Exclusive: Google’s jobs search draws antitrust complaints from rivals, August 13, 2019, available at: https://uk.reuters.com/article/us-eu-google- antitrust-exclusive/exclusive-googles-jobs-search-draws-antitrust-complaints-from-rivals-idUKKCN1V30IX.

[4]      Financial Times, Vestager: French-German antitrust push would have cleared Google, March 31, 2019, available at: https://www.ft.com/content/676e24c6- 509a-11e9-b401-8d9ef1626294.

[5] GCR, Mosso: DG Comp will “rethink” state aid rules, September 17, 2019, available at: https://globalcompetitionreview.com/article/1197711/mosso-dg-comp- will-%E2%80%9Crethink%E2%80%9D-state-aid-rules.

[6] Commission Regulation (EU) No. 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices, OJ L 102/1.

[7] Communication from the Commission – Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co- operation agreements, OJ C 11/1.

[8] European Parliamentary Research Service Briefing, Margrethe Vestager – Vice-President: A Europe fit for the digital age, September 2019, available at: http:// www.europarl.europa.eu/RegData/etudes/BRIE/2019/640171/EPRS_BRI(2019)640171_EN.pdf.

[9] Ibid.

[10] MLex, Tech giants face antitrust and regulatory tag-team, EU’s Vestager says, September 1, 2019, available at: https://www.mlex.com/GlobalAntitrust/ DetailView.aspx?cid=1127400&siteid=190&rdir=1.

[11] Regulation (EU) 2015/751 of the European Parliament and of the Council of 29 April 2015 concerning interchange fees for card-based payment transactions, OJ L 123/1.

[12] Financial Times, EU draws up sweeping rules to curb illegal online content, July 24, 2019, available at: https://www.ft.com/content/e9aa1ed4-ad3 5-11e9-8030- 530adfa879c2https://www.ft.com/content/e9aa1ed4-ad3 5-11e9-8030- 530adfa879c2.

[13] Margrethe Vestager, Security and trust in a digital world, Speech to CCBE Standing Committee, September 13, 2019, available at: https://ec.europa.eu/ commission/commissioners/2014-2019/vestager/announcements/security-and-trust-digital-world_en.