By Valentina Pop and Rochelle Toplensky
BRUSSELS -- The European Union official overseeing the
regulatory push against Silicon Valley is poised to stay on the job
for an unexpected second term -- a warning that the new
administration here isn't backing down on global tech
oversight.
Incoming European Commission President Ursula von der Leyen's
decision to keep Margrethe Vestager as the competition chief --
while also giving her a new, wider portfolio to guide European
rule-making related to the digital economy -- was met by audible
gasps from staffers and journalists at a news conference Tuesday.
Ms. Vestager had been widely expected to take a more senior role
and leave the day-to-day business of antitrust probes and
enforcement to a new official.
The reappointment of Ms. Vestager, whom President Donald Trump
labeled the "tax lady" after her ruling to collect from Apple Inc.
what the commission said was back taxes, punctuates Mrs. von der
Leyen's push to be more assertive with economic and commercial
competition from the U.S. and China.
Mrs. von der Leyen said she kept Ms. Vestager on because of
outstanding performance in her first term and since, in her view,
competition is "closely linked to the digital sector."
Ms. Vestager is slated to become one of Mrs. von der Leyen's
three executive deputies, or vice presidents, providing her with
extra clout in commission deliberations. Her office is tasked with
shepherding new regulation on artificial intelligence by early next
year, as well as with upgrading the bloc's liability and safety
rules for digital platforms.
Ms. Vestager was one of the senior officials floated for the
commission's top job, as a lead candidate from the broad family of
European centrist politicians championed by French President
Emmanuel Macron. Her promotion to commission vice president was
part of the July deal in which Mr. Macron secured support for Mrs.
von der Leyen.
Ms. Vestager was expected to hand over the competition role,
which comes with responsibilities for investigating and enforcing
antitrust issues, including through hefty fines, as she ascended to
a higher post in the commission. It is very rare for commissioners
who stay on to keep the same portfolio. The competition
commissioner has historically been kept clear of other policy
areas, so as not to influence antitrust decisions.
In an interview, Ms. Vestager said she will maintain the
independence of the antitrust division. "With the more horizontal
responsibility, I will make sure the integrity of our procedures
and independence in the law enforcement is nonnegotiable."
She said the commission will focus on enforcing the bloc's newly
established data-protection regime to ensure that users are in
control of their data and on enabling businesses in Europe to share
and use data for innovation.
Ms. Vestager made a name for herself by imposing record
antitrust fines on U.S. tech companies, including a total of $9.4
billion on Alphabet Inc.'s Google. She also ordered Ireland to claw
back $15 billion from Apple in what the commission called unpaid
taxes.
The Obama administration took aim at Ms. Vestager, saying her
approach to tech regulation slanted against U.S. firms, an
accusation European officials have denied.
The unit she has led for the past five years has also pursued
high-profile probes against Amazon.com Inc., Facebook Inc. and
Qualcomm Inc., as well as against nontech American giants like
McDonald's Corp., Fiat Chrysler Automobiles NV and Starbucks
Corp.
Ms. Vestager has drawn vitriol from Washington for years. As
U.S. officials pile in with their own scrutiny of Silicon Valley,
some American officials, including Mr. Trump, have accused her of
tresspassing on Washington's regulatory turf. In June, referring to
Ms. Vestager, Mr. Trump told Fox Business she "hates the United
States perhaps worse than any person I've ever met." He said "she's
suing all our companies. We should be suing Google and Facebook,
and perhaps we will."
Ms. Vestager has denied that she is targeting U.S. companies for
their nationality or that she harbors any ill intent towards the
U.S.
The 51-year-old Dane, who officials say often pulls out her
knitting during discussions, first rose to prominence as an economy
minister in Denmark, where she assumed a leadership role in Europe
during the financial crisis. An economist by training and a skilled
navigator of Denmark's multiparty system, Ms. Vestager was the
inspiration for a political TV drama series in her home country. As
a commissioner, her no-frills demeanor and her colorful, in part
self-sown, wardrobe helped her stand out in the Brussels
officialdom.
She will now remain the public face of Europe's new scrutiny of
big tech. The threat of heightened regulation in Brussels, and more
recently Washington, has emerged as a key issue facing the Western
tech giants, dominated by American companies.
Europe, largely under Ms. Vestager, has taken a lead role over
policing Silicon Valley in recent years, despite not having many
homegrown tech players. It flexed its globe-spanning sway most
notably in a sweeping privacy directive last year that has forced
companies inside and outside Europe to adhere to strict rules on
data.
Washington has more recently stepped up scrutiny, too. Two
separate groups of attorneys general are investigating Google and
Facebook. Federal antitrust enforcers at the Justice Department and
the Federal Trade Commission have separately trained their sites on
Google, Facebook, Amazon and Apple.
With some of these probes overlapping in terms of focus, Ms.
Vestager said in the interview she "always appreciated the
cooperation" with her American counterparts, without committing to
seeking any. She said though that she will "follow with great
interest what colleagues are doing on the other side of the
Atlantic."
American tech companies have said they generally welcome greater
oversight. Apple Chief Executive Tim Cook last year in Brussels
attacked the "data-industrial complex" and called for tighter
privacy regulation. Facebook has touted its new efforts to police
the content on its site.
Industry watchers warned tech giants to brace for more European
scrutiny under Ms. Vestager.
The commission's focus on "digital giants is set to sharpen
further," said Alexi Dimitriou, competition counsel at Ashurst, a
multinational law firm. "With her remit also expanding to
coordinating wider digital policies, digital business should expect
regulatory intensity to continue," he said.
Europe's umbrella trade group for local tech companies, which
often compete with the American giants, welcomed the move. "We
believe Ms. Vestager can provide the necessary proactive leadership
to bring Europe to the forefront of the emerging global digital
era," said Cecilia Bonefeld-Dahl, director general of
DigitalEurope.
Ms. Vestager has also forged a reputation as a defender of
European consumers, unmoved at times by government lobbying to
support big mergers that many European capitals believe are key to
the region's competitiveness against the U.S. and the rising
economic might of China.
Under her tenure, the European Union in 2017 blocked such
high-profile deals as the proposed $28 billion tie-up between
Germany's Deutsche Börse AG and U.K.-based London Stock Exchange
Group PLC. She also blocked the merger of the railway businesses of
Germany's Siemens AG and France's Alstom SA, despite calls from
Paris and Berlin for the creation of a European champion that
politicians hoped would be able to take on Chinese competitors.
In another key economic appointment in Brussels, Ireland's Phil
Hogan was nominated to take over the bloc's top trade post, where
he will be responsible for negotiating future trade deals with the
U.K. after Brexit, and with the U.S. Mr. Hogan, currently
commissioner for agriculture, has been a tough critic of Brexit and
the U.K.
Mr. Hogan will also inherit the looming threat of car tariffs,
in addition to duties on billions of dollars of EU exports that the
Trump administration has readied in a long-running U.S.-EU dispute
over aircraft subsidies.
--Emre Peker in Brussels and Ben Dummett in London contributed
to this article.
Write to Valentina Pop at valentina.pop@wsj.com
(END) Dow Jones Newswires
September 10, 2019 17:05 ET (21:05 GMT)
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