The most feared woman on large platforms

Margrethe Vestager is preparing for her second consecutive mandate as Commissioner for Competition of the European Union, a rarity in the context of European institutions where usually most of the tasks are assigned to new politicians when the Commission is renewed. With his way of making courteous, at times a bit brisk, Vestager has not spared billionaire criticisms and fines on some of the biggest US technology companies in the last five years, earning the respect of most European politicians and fears of powerful companies like Google, Apple and Facebook. Over the next five years, the Commissioner will have even more powers and could influence 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, Danish and belonging to the social-liberal party of the center "Sinistra Radicale", Vestager has made himself known in his years as Commissioner for Competition thanks to the billionaire fines. The measures against Google for abuse of dominant position and damage to free competition have reached a total of over 8 billion euros, while Apple has received a fine of about 13 billion euros on charges of having circumvented the payment of taxes in Europe. Both companies have appealed, requesting a review of fines by European judges.

In a recent interview granted to New York Times, Vestager explained that in recent years user confidence in large platforms has decreased significantly, giving them the opportunity to have a much harder 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 having actually promoted the dissemination of false news and Russian interference during the presidential elections US for 2016.

During the process of approving his new appointment to the European Parliament, Vestager presented a plan for the next five years as Commissioner for Competition, keeping Internet companies as a prime objective. Among the proposals there are: the removal of some protection systems that exempt large platforms from responsibility for the contents published by users, new mechanisms to ensure that Internet companies pay taxes in Europe without evading them with various tax stratagems and more in-depth investigations into the advantages exploited by companies to block their competitors.

Vestager also undertook to address the issue of artificial intelligence, proposing to the European Union to adopt clear rules for the development and exploitation of these technologies, avoiding that they end up out of control before being regulated (a concern shared by many experts of the sector). Among his proposals there is also a plan to offer greater guarantees to the new jobs that have emerged with the diffusion of services via the app, such as Uber drivers and Deliveroo food delivery staff.

Over the next five years, Vestager will continue above all to deal with large US platforms and their activities, often in a substantial monopoly regime: Google is the most used search engine in most of the European Union, Facebook is the most popular social network by Europeans and at the same time controls Instagram and WhatsApp, the services most used to share images and to exchange 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 so when the company exploits its condition to cause damage to its competitors. In several cases, Vestager has identified this circumstance by launching investigations that have led to billionaire fines.

At the end of the previous mandate, Vestager had started investigations – still ongoing – against Amazon, another large US company that produces many businesses in Europe in the online commerce sector. The suspicion is that Amazon implements policies that actually benefit it over 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 rather ambitious, but Vestager will be able to carry them out only if he receives the right support from the new European Commission and other institutions. Looking at the declarations of intent and the guidelines 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 on several occasions spoken of the need for the European Union to have its own "technological sovereignty", reducing its dependence on US companies. The issue has been debated for years, but so far it has not led to concrete results: almost all the big platforms are American and have developed their services in a legislative context different from the European one, with fewer restrictions on privacy and competition, considered a obstacle to growth in the technology sector. This has led US companies to expand quickly, to the point of having dimensions and competitive advantages that are difficult to fill, especially for European startups that have to deal with a much more fragmented European market than the US one.

For about two years, French President Emmanuel Macron has proposed initiatives and plans to reverse the situation, asking that the European Union itself offer incentives and resources to startups to emerge and confront large platforms. However, funding must be included in plans shared between member states and organized so that they do not constitute state aid. The European Investment Bank, the financial institution for the financing of activities in the European Union, has participated in various plans for startups, but without appreciable results.

The fear of some analysts is that an approach too harsh on Vestager's part and on the new Commission to limit the intrusiveness of US companies can backfire against European companies and startups. Something similar has happened in recent years with the new regulation for privacy (GDPR) which entered into force in the European Union: for experts, it is among the best in the world for protecting user data, but has involved the application of expensive rules and technological changes that the large and rich US platforms have been able to tackle without problems, unlike the smaller European companies with fewer economic resources.

The rules and provisions on competition decided by the European Commission naturally apply to both European and non-EU companies, but it cannot be concealed that some are designed primarily to reduce the influence of US platforms. Sometimes considered 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, inclined to impose duties as demonstrated by the so-called "trade war" against China .

And Trump himself is one of the most critical towards 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 commented sarcastically: "Since I know very well the relationship I have with the United States, (Trump) he must have only met people who really like the United States very much, if they are the one they like least."

In fact, the initiatives carried out by Vestager have had some influence in US politics, at a time when both Republicans and Democrats want to reduce – for different reasons – the great power accumulated over the years by Google, Facebook, Amazon and others. The orientation, shared also by many general prosecutors, is to move quickly with the investigations, in order to put in place structural changes and not just billion fines. On speed, the European Union has partly failed: the investigations took years to be conducted, leaving the companies involved time to reorganize and contain the outcomes of the decisions taken on their activities. The sense of urgency in the United States is exacerbated by the current political situation and the imminent presidential elections of 2020, in order not to repeat the errors of the previous elections.

Vestager has admitted that in some circumstances the European Commission has moved slowly, but believes that things can go differently during the new mandate. In part he had already demonstrated it in the last period of his first term, applying some "interim measures" to force companies to interrupt practices deemed unfair, 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 Commissioner, Vestager will also have 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 in order to better regulate some aspects of the Internet, updating old rules and no longer suitable for the current context. Among the most discussed topics is the possibility of imposing fines and penalties on large platforms that do not remove illicit materials from their services. Above all, Vestager has in mind Facebook, a 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 hate messages: “You have to put them offline because you they spread like a virus. But if it is not done with the right speed, it becomes necessary to impose new rules ".

As for the unfair and detrimental practices of competition in the online sales sector, the attention has focused in 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, so as to take advantage of the sales it manages directly. On Apple, on the other hand, there are suspicions about the way in which it organizes the contents inside the App Store to benefit its own apps (linked to subscription services) compared to those of the competition. Spotify, for example, accuses Apple of having favored 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 affects 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 involved in investigations and fines have maintained almost always conciliatory tones with the European Commission, saying they wanted to work together to solve 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 managers have used rather critical tones to comment on the measures taken against them. The CEO of Apple, Tim Cook, usually measured and mild, has gone a little further by defining a "total political crap" the fine against his company for the non-payment of billions of taxes in Europe, made possible by policies tax advantages adopted by Ireland until a few years ago.

In addition to having enormous economic resources and powerful networks of influence, the big platforms have on their side another fact not insignificant: their services like 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 will not go beyond a certain point, because European politicians would risk losing consensus, and try to exploit this advantage to counteract the antitrust initiatives that concern them.

Vestager believes, however, that the European Union should better define a coordinated approach to the development of the 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: "The market forces are welcome, but we will not let market forces have the last word: the markets are not perfect ”.