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28 September 2022

The US and EU are Teaming Up to Contain Big Tech


LATE LAST WEEK, Margrethe Vestager, the European Commission’s digital competition czar, arrived in New York on a high note. The day before, an EU Court upheld a decision by her office to fine Alphabet for using its Android operating system to hurt competition, setting the penalty at $4.1 billion.

It was a reminder of the power Vestager wields over US tech companies. In 2014, she left her position as Denmark’s deputy prime minister to become competition chief at the European Commission, the executive arm of the European Union. In Brussels, she took on Apple for evading paying corporate taxes in Ireland, fined Google millions for favoring its own shopping services in search, and called out Facebook’s lack of transparency in its WhatsApp acquisition—leading to her name being floated as a future president of the European Commission. In 2019, she rose to her current role as the Commission’s executive vice president for competition and technology, taking on broad enforcement power over regulating data collection and monopoly-busting within the European Union.

During her visit to the US, Vestager met with officials at the Federal Trade Commission and Department of Justice. She also stopped by WIRED’s New York office to discuss how the US and the European Union can work together to protect privacy and rein in Big Tech. The interview has been edited for length and clarity.

Jennifer Conrad: What message should the Google fine send to other US tech companies about their future in Europe?

Margarethe Vestager: I think that message has been quite clear for some time: Europe is open for business, but there is a rulebook, and it's for everyone. We have had three Google cases already. We have another Google investigation pending on Google’s advertising technology. We've had two Amazon cases already, and now have a third. We have a Facebook case pending, and three Apple cases.

When I was new in the job and started the first Google case, coming to Washington and walking up the Hill with my case under my arm, it was like, “What is that crazy woman doing?” But a lot has happened since then. I think concern over market abuse has changed dramatically in public opinion and among enforcers at the federal and state level.

It's not just an EU-US trend. It’s a global trend to say: “Listen, we need fair open markets, we cannot just have rules set in the boardrooms of Big Tech.” It's intriguing to see the different processes. South Korea was the first to pass legislation on app stores. What they did in Australia to have copyright respected and remunerated is interesting. There's been something similar ongoing in France, where Google is signing contracts with quite a number of publishers to pay for news.

I like a number of the proposals that have been tabled here in Congress. It's a somewhat bipartisan issue. I think it's the same as in Europe—it's not a left or right thing.

Are there areas where you think there can be more collaboration among regulators?

We work very closely with our US counterparts, both the DOJ and the FTC. If we start a competition case, and we know US colleagues are looking at the same things, we ask the companies, would you allow us to exchange information and talk about this? As soon as we have the necessary waivers, we can discuss theories of harm, how we see things, how to push for things.

It’s beneficial for us because the more clever eyes looking at a case, the better we do. For the companies, if it's something that can be remedied, then maybe one remedy will work on both sides of the Atlantic. We’re different democracies, but we are democracies, and we can do more to work together to set the standards for how technology is being used and developed. There’s a need for that globally.

In the US, talk about tech competition often turns to China and investment by Chinese companies in the US. Is the same conversation happening in Europe?

Well, we got ourselves two new tools recently. One is screening of foreign direct investment to see whether investors come with the right intentions: to do business and make money, which is a good thing, or if there is a risk that public order or security will be undermined. The second is a tool to look at foreign subsidies. For instance, if there is a public tender for a bridge, foreign companies are not able to give attractive bids because they get cheap financing or subsidies. [The regulation, expected to go into effect next year, also applies to mergers and acquisitions in the EU.]

The EU's Digital Services Act and Digital Markets Act, two laws aimed at regulating online spaces and promoting competition, go into effect within the next two years. What will this mean for the everyday user?

If you look at the DSA, the internet should become a safer place and more similar to physical reality: Your consumer rights will be upheld, you will know that there is someone to complain to if what you buy is flawed, and things that are illegal will be taken down. The Digital Markets Act is a drive for innovation in the marketplace, so that smaller businesses can really make it. It will also give us information about acquisitions by Big Tech of smaller companies, so that we can check whether a target is something that actually ought to scale independently.

These new laws will give you broad power to probe companies and their actions. What kind of enforcement power will you have?

The process of building up enforcement capacity is ongoing. Brussels will be the sole enforcer, but we coordinate very closely with member states. We may form common investigative teams. National competition authorities can also enforce outside of what is covered by the DMA.

The EU’s last Big Tech regulation, the privacy framework GDPR, has been criticized for not shielding people as much as had been hoped.

A lot of people now realize that they have rights, but find it very difficult to make good use of those rights. Our data protection authorities in Brussels—and also national authorities—are trying to find ways to make it easy for businesses to comply, but also make it easy for people to see, “Okay, I have real choices here.”

On a personal note, I'm a bit disappointed that there are not more businesses saying: We do privacy by default and we’re interested in providing services without collecting enormous amounts of data about people. Awareness needs to increase about the simple fact that you pay with your data for services. We have high inflation and every price is going up. You should have the same cautiousness that you have when you do your shopping in a corner store when you pay for a service with your data.

As a consumer, it can feel like the only option you really have is to check a box.

Part of the DMA and the DSA is that dark patterns are forbidden. That means you need to be much more precise about the choices people have. Many people, if they want to make a choice, they don't even know, is this slider on or off? There's huge room for improvement here.

Europe is grappling with an energy crisis and high inflation. Are issues of data, privacy, and competition going to take a backseat?

We cannot afford to put something like this on the back burner. To get out of the crisis, we need innovation in how to fight climate change, in new business models that can cope with the situation that we're in right now. The point of what we do—competition, law enforcement, the DMA, the DSA—is to make sure that the market is open, that we have the competitive drive. There's no way we can solve a crisis without innovation.

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