By Valentina Pop
European Competition Commissioner Margrethe Vestager has become
a household name in Silicon Valley since she ordered Apple Inc. to
pay $14.5 billion in alleged unpaid taxes to Ireland and fined
Alphabet Inc.'s Google a total of $7.8 billion for allegedly
abusing its dominance to clobber rivals.
In June, President Donald Trump referred to her as the EU's "tax
lady" and said she "really hates the U.S."
Ms. Vestager -- who rejected Mr. Trump's characterization
shortly afterward, saying "I very much like the U.S." -- says in an
interview with The Wall Street Journal that she never looks at the
nationality of a company when cases are brought to her, and that
the only thing that matters is for U.S. tech giants to play by
Europe's rules on competition and privacy.
More rules for companies dealing with data in the
ever-digitizing economy and the Internet of Things could emerge
after a report due in March, she says.
Here are edited excerpts of the interview.
Just obey the rules
WSJ: You made a name for yourself with high fines and tax probes
against U.S. tech giants. Should Silicon Valley be afraid of
you?
MS. VESTAGER: No, of course not. They should consider the way
they do business.
This is our test: Do you serve the consumer or don't you? That's
the most important point. As I see it, the huge majority do
business by the book. They should know that there is such a thing
as law enforcement. So that those who do not do business by the
book, they would have to reconsider.
WSJ: Europe is creating this new privacy-enforcement regime,
with data-protection authorities modeled on the existing
competition authorities, including the fines system. Is this a
model that you see being replicated around the world, and do you
expect privacy-related fines on U.S. firms?
MS. VESTAGER: That remains to be seen. But with more and more
global businesses, they have to consider whether they have ways of
doing business based on the privacy model that is here or the one
that is there.
If you make a parallel to the competition law enforcement, what
you have seen over the last 20 years is a convergence among the
different jurisdictions when it comes to competition law.
Of course deterrence is a big part of it. Since it takes some
time to catch the guy who does the illegal thing, it's better to
prevent the illegal thing from happening. And this is why the level
of the fine is important. The fine shouldn't just be one line in
your spreadsheet. It should be a big fine, with reputational damage
from it. That's also part of the logic behind the higher fines when
it comes to privacy. Up to 10% of the global revenue, that's the
cap.
WSJ: You say it's about the European consumer and the EU rules,
but we have these big American players -- Facebook, Google, Apple
-- and there is this impression that the EU is out to get them or
to regulate them or to break them up. Does their behavior merit
thinking about something like that?
MS. VESTAGER: I think it becomes a straw-man argument, so that
we're discussing something else instead of discussing the real
thing.
This is not about your nationality. This is very much about
being multinational. Being based in many countries, of course you
have obligations wherever you go, with the rules made in those
democracies where you do business. It's not about where you come
from, it's about what you do when outside.
Protecting the small guy
WSJ: Is competition policy the right way to address big tech's
behavior when it comes to the use of data gathered?
MS. VESTAGER: It's at least part of the solution. But it's not
the full solution. My colleagues responsible for the regulatory
part of it tabled a proposal to oblige platforms to be much more
transparent with their customers.
WSJ: But you suspect that sometimes the platforms have ulterior
motives, say Amazon getting the data on customers and products and
then cutting out smaller vendors?
MS. VESTAGER: The question is if that data is used for you
basically to take over [a small vendor's] business. You see what is
trending and you say, "Wow, this is where I want to go." And then
it becomes very difficult [for the small vendor to compete with
you]. We don't know yet if this is an issue within competition law,
but we want to understand it in full.
European startups
WSJ: There is often talk in Europe about why there are no
European tech champions like Facebook and Google. Or why does a
European company like Skype have to go to the U.S. to become big.
China has created its own champions by barring U.S. giants from its
market. Would that be a model for Europe?
MS. VESTAGER: If you look at the entrepreneurial environment in
Europe, it's buzzing, the startup environment is very strong. But
the capital market is not as supportive as it is in the U.S.
The European Commission is working intensively to have what we
call a capital-markets union, so that as a small business about to
grow you don't just have to go to banks -- [it would be] much
easier to get capital [and the management help that often comes
with it]. That's been lacking in Europe. It's an underestimated
barrier to growth.
WSJ: This being your last year in office, is there anything you
want to accomplish by the time this term is over?
MS. VESTAGER: We are preparing deeper insights into whether we
need more regulation. Three special advisers on the digital economy
will come up with a report in March.
We're also working [to upgrade our investigative technology].
For instance, in a raid, if we return to the office with 700,000
documents -- to be able to process that, data-mine it, organize it
so that you see where is the smoking gun in these 700,000
documents.
Ms. Pop is a Wall Street Journal reporter based in Brussels. She
can be reached at valentina.pop@wsj.com.
(END) Dow Jones Newswires
November 09, 2018 05:44 ET (10:44 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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