[co-author: Thomas Wright]

Summary

Ursula von der Leyen’s Commission has been confirmed by the European Parliament. President von der Leyen has entrusted Margrethe Vestager with promoting Europe’s digital economy while continuing for a rare second-term as Competition Commissioner. Concerns remain over whether Commissioner Vestager can avoid conflicts of interest between her two portfolios.

In our previous blog on the new Commission, we reported on the delay of president-elect Ursula von der Leyen’s Commission caused by the European Parliament’s rejection of three of her Commissioners-designate. The European Parliament finally ratified von der Leyen’s College of Commissioners on 27 November, with the new candidates from France, Hungary and Romania all surviving their confirmatory hearings.

Today, the new Commission begins its work. It includes a number of seasoned veterans of previous Commissions. Amongst the returning Commissioners is Margrethe Vestager, one of the most prominent members of Jean-Claude Juncker’s Commission. Vestager has been re-appointed as Competition Commissioner and awarded a Vice Presidency with a focus on promoting Europe’s digital economy.

Vestager Part II – Digital, Digital, Digital

Vestager’s surprise reappointment was one of the headline stories from von der Leyen’s announcement of the division of portfolios amongst her Commissioners-designate. Despite rumours that the Italian or French Commissioner-designates would be heading to DG Comp, Vestager became the first Competition Commissioner to serve successive Commission Presidents since Karel van Miert in the 1990s.

Von der Leyen’s letter to Vestager in September 2019 set out separate mandates regarding her split roles. As competition chief, she is expected to strengthen enforcement, review the Commission’s competition rules and use sector inquiries in new and emerging markets. As Vice President for a Europe fit for the digital age, she must promote investment in research and innovation, reduce the regulatory burden for SMEs and work on sharing and using non-personalised big data.

Giving added meaning to the phrase “split second”, placing Vestager in charge of both competition and the promotion of the EU’s digital economy in her second term has risen a few eyebrows. Without focusing on whether she will have enough hours in the day to manage her expanded workload, many individuals believe the dual role creates a conflict of interest. Wearing her first hat, Vestager is the champion of Europe’s digital economy, while her other hat deems her the Union’s competition law enforcer. In respect of the latter hat, it is no secret that in targeting the big tech companies Vestager has collected a few political enemies along the way. Trying to reconcile the new Commission’s clear move toward an industrial policy push (including the drive for EU “Digital Sovereignty”), with the competition policy side of her job, could prove to be a tricky tightrope act for Vestager.

In her EU Parliament confirmation hearing, Vestager faced few difficulties and comfortably secured the backing of MEPs. It was her new dual role, however, that caused her the most difficulty. MEPs were reportedly unimpressed by her attempts to reassure them about a potential conflict of interest. Her main argument to assuage these concerns both during and after the hearing was that her actions would be open to public scrutiny and challenges in court.

This split role in her second term may benefit Europe’s digital economy if Vestager can encourage businesses to grow without falling foul of competition law. The fear, though, is that Vestager’s world-renowned resolution for tackling perceived abuses by the big tech players might inhibit the very growth that she needs to protect.

Von der Leyen’s mission letter promised the support of the Secretariat-General for the co-ordination of Vestager’s digital economy responsibilities. It remains to be seen which parts of the Commission will be carrying out the day-to-day work stemming from her digital vice presidency, although it seems likely that she will rely on DG Connect and its Commissioner, France’s Thierry Breton, to support her in this role.

Vestager Part II – a rare second swing at competition

Managing the digital economy is a significant part of Vestager’s wider antitrust mission. In fact, many commentators have highlighted that there was under enforcement in big tech prior to Vestager’s uptake. Within her remit, recently Vestager has been considering whether large internet companies should be subject to a reversal of the burden of proof where anticompetitive behaviour is suspected. Potential rule changes she’s looking at in this area could require dominant online platforms to demonstrate the benefits of their actions to avoid various sanctions including financial penalties from the Commission.

While Vestager may have kick-started more scrutiny of big tech companies in respect of the EU, it seems as though she may have also given courage to fellow antitrust regulators around the world in the digital market. In the last two years, competition agencies in China, Japan, South Korea, India, Australia, Brazil and many EU Member States have conducted investigations, commissioned reports or set up specialist units to scrutinise various aspects of the digital market. Furthermore the US, which previously defended its tech giants or was passive in the enforcement arena, has joined the crusade by the actions of many stakeholders including the US Congress and all 50 State Attorneys General. Even the Department of Justice and the Federal Trade Commission are now looking closely at Silicon Valley companies and their activities with respect to potential anticompetitive conduct.

Despite all this, Vestager’s ambitions for the next five years at DG Comp extend beyond the digital market. In her confirmation hearing, Vestager stressed the importance of improving and enforcing the current legislative framework wherever possible rather than seeking new legislation. This was in line with von der Leyen’s wider drive for her new Commission to avoid introducing additional red tape for businesses. Vestager added that the Merger Control Regulation should be revised to help European companies compete internationally. She also expressed admiration for the UK’s market investigation regime and commented that the Commission was examining whether it could adopt similar practices. She confirmed that she would continue to use the Commission’s state aid powers to tackle unfair tax rulings.

Undoubtedly, Vestager’s additional responsibilities have not diluted her determination to take action in the digital market. Europe, and the world, can expect Vestager Part II to live up to the widely acclaimed first instalment.