Interview: “Business models are changing. It is not only those who have tech as their main competence – the Googles, the Amazons – and we have not seen the full picture yet,” the EU Commissioner for Competition, Margrethe Vestager, tells The Sustainian. After taking on Silicon Valley, EU’s antitrust chief wrestles with data: a market power that is hard to understand, let alone control.

Margrethe Vestager warns that the business world is in the midst of a data-driven revolution, and it’s hard to keep up. If the world’s toughest antitrust regulator does not have the full market picture, is fair competition a thing of the past? Hear how Vestager is fighting for a level playing field against her ever-morphing adversary.

The world is undergoing unprecedented technological change in the fourth industrial revolution. It took the telephone almost a century to reach 100 million users worldwide. The mobile phone reached that milestone in 15 years; Candy Crush Saga hit the same number in months. The EU’s antitrust chief Margrethe Vestager admits the speed of technological transformation makes the new economy impossible to fully comprehend. So how is the 50 year-old Dane regulating the markets without clearly seeing the road ahead?  

Silicon Valley is Everywhere

Margrethe Vestager has investigated American tech giants, forcing them to pay billions of dollars in fines and back taxes for unfair practices. The world’s most audacious regulator now faces a digital power reshaping not just Silicon Valley, but the entire world economy. Whether you are in tech, a more traditional company or public administration, you are affected by data, Vestager insists. “We are in the middle of an industrial revolution…everything becomes data driven – agriculture, transportation, health, public administration,” she points out.

“On the one side we see behavior which is as old as Adam and Eve – greed, fear, power, cocktail of the three – being the driving motive… At the same time we see completely new ways of working because technology data is driving the way our economy works.”

Data is forcing even those producing physical products to keep changing in response to post market data feedback. Resistance to the ubiquitous force is futile, so Vestager wants to ensure regulation acts as a stimulus for change – not a shelter from data-driven transformation. “If we think we should be cushioned and taken care of and protected, then we will be overrun… Actually, competition on the merits is our friend in times of change, because it keeps us agile,” the EU Commissioner explains. But to keep competition fair, Europe’s antitrust chief needs to figure out the workings of a new business model which is in constant digital disruption.

Data is the New Antitrust Adversary

Vestager focuses on what we know now to help understand the digital unknown – a place she describes as a meeting point of Adam and Eve with Big Data. “On the one side, we see behavior which is as old as Adam and Eve – greed, fear, power, a cocktail of the three – being the driving motive. At the same time, we see completely new ways of working because technology data is driving the way our economy works.” To illustrate, Vestager explains that Uber is still transporting people like a taxi and Airbnb still provides a roof over their heads like a hotel, but add data to those services and you get an entirely new reality. Rapid digital transformation is making raw data a precious resource in the global economy. “Sometimes data is extremely precious. If, for instance, you have access to health data for long periods of time, it is a treasure chest for resources of innovation,” she points out. But control over data can also give companies an unfair advantage. Vestager says she now includes the value of data when analysing the impact of mergers on fair competition.

Regulation ensures that data, as well as any other asset, is treated in a way where we can still enjoy competition, affordable prices, choice, competition in innovation.

Market domination is not Vestager’s only concern. She also watches how companies use private information to profit from targeted ads. Facebook made almost US$ 40 billion in ad revenue in 2017. But scandals like Cambridge Analytica’s misuse of data from millions of Facebook users highlight the growing risks. The European Commission is fighting back against data exploitation with the world’s toughest privacy law, GDPR (General Data Protection Regulation). Vestager says GDPR gives consumers more control over how their data is collected and used, while preventing businesses from keeping more private information than they need. She brushes off complaints about the burdens of compliance, pointing out lighter regulations for small and medium sized businesses, especially those who do not possess data. Besides, she says, it will force companies to innovate while playing by the rules.

Data: Regulating a Morphing Adversary

Critics object to Brussels setting the market rules for rapid technological advancement which is too difficult to understand. Vestager has also been accused of bias against American companies. But the EU’s antitrust chief insists fair competition is key to making the information economy work for all. Regulation ensures that “data, as well as any other asset, is treated in a way where we can still enjoy competition, affordable prices, choice, competition in innovation.” And, Vestager believes, it is possible to ensure fair play in a time of rapid change. The Commissioner uses the results from her antitrust rulings, most recently against Google, as proof. The tech giant’s rivals are seeing the first benefits since Google revamped Search to level the playing field.  

Margrethe Vestager is determined to keep fighting corporate dominance and private data abuse despite all the digital unknowns. Last week she hit Google with a record $5 billion for thwarting competitors by unfairly forcing its search and web browsing tool on Android makers. Google denies it broke the rules and will appeal. She recently hired three academics for a year-long study on how data is transforming the global economy.

When Vestager is not fighting tech giants she knits toy elephants for her friend’s children. The mother of three likes elephants because “they live in groups, they are led by a female, they remember well. If you treat them badly, they remember that. If you treat them well, they remember that as well. I like that approach.”

 

Bio:

Margrethe Vestager is EU Commissioner for Competition, responsible for enforcing European antitrust law. Europe’s chief regulator is known for her rulings against US tech giants Apple, Facebook, Google and Qualcomm. Before arriving in Brussels in 2014, she served as Denmark’s economy minister and deputy prime minister in the center-left government of Helle Thorning-Schmidt. As economy minister, she pushed through unpopular cuts in retirement and unemployment benefits. The daughter of Lutheran priests, Vestager entered politics at age 21 when she joined the centrist Danish Social Liberal Party. She was elected to parliament in 2001 and quickly rose to become party leader. Vestager inspired the lead character in the political TV drama “Borgen”. The mother of three commutes from Brussels to Copenhagen where she lives with her husband, a math teacher, and youngest daughter.