Margrethe Vestager is the commissioner for competition in the European Union’s executive branch, the European Commission, which means that she makes decisions affecting companies from U.S. Internet titan Google to Russian energy giant Gazprom.
She spoke with Handelsbatt about making sure big companies follow the rules.
WirtschaftsWoche: Ms. Vestager, do you like a fight? After hardly a year in office you have already initiated proceedings against Apple, Google, McDonald’s, Starbucks ...
Margrethe Vestager: I have the founders of the European Union to thank. They left no doubt in the founding treaties about the importance of competition in the E.U. to ensure that the strong don’t oppress the weak and that the law of the jungle doesn’t rule Europe. I try to live up to these principles.
Do you simply have something against large, successful companies?
Not at all. On the contrary, I congratulate all companies when they are able to attract a lot of customers. But my enthusiasm ends when they exploit their market power.
You primarily accuse the U.S. search engine giant Google of doing just that.
We believe we can prove that Google has taken advantage of its dominance in search requests. We have sent our objections to the company and received a detailed reply that we are now reviewing. Essentially, it is a matter of whether I, as a customer, can trust Google – namely that a search entry will show me the best products and not the product that Google wants to promote. After all, the service may be free but we pay for it as customers by providing data or looking at advertising.
Our competition law is strong enough to deal with any company, no matter the size.
Can we as customers really complain? We're the ones who collectively made these companies huge in the first place.
I use Google and so do my children, simply because it's the best service provider. But that makes it all the more important to make sure that such a giant obeys the rules. My work as a European commissioner has nothing to do with anti-Americanism, as some U.S. industry representatives have suggested. And it also isn’t a tactic for diverting attention from the fact that Europeans have to catch up in IT. I've said for a long time that we finally have to make more venture capital available for tech founders in Europe.
Some E.U. parliamentarians are even calling for Google to be broken apart because they are concerned about IT infrastructure.
My job is to enforce the law. Any speculation beyond that would only be detrimental to the process. Our competition law is strong enough to deal with any company, no matter the size.
You are also making headlines with tax demands. Such as Google having to pay billions in back taxes that the corporation saved thanks to lax regulations in Ireland.
The great majority of companies in Europe pay their taxes fully and on time. Naturally, it’s upsetting that some companies apparently do not.
But E.U. countries outdo each other with tax deals in trying to attract corporations.
There is nothing at all wrong with countries competing with each other in corporate taxation. But it's wrong when individual companies in certain countries only have to pay infinitesimally low tax rates. That's when I take a closer look. If there has been illegal government aid then we can require that the countries demand it back, even if it amounts to billions.
That will only really change when the states stop competing in this way.
We are making progress. Years ago as Danish finance minister I was already trying to achieve more European tax cooperation – though in vain. But now tax-saving packages are being restricted E.U.-wide, and the exchange of information between tax authorities is being massively improved.
That's also because tax deals came to light in Luxembourg, home of the president of the European Commission, Jean-Claude Juncker. Does that damage the commission’s credibility?
I am able to work completely independently.
Your home country Denmark used to be so liberal, but now refugees are being forced to turn over their valuables. What happened?
As a European commissioner, I don’t want to get involved in national politics. But I can remember how lines used to form up to 15 kilometers long in front of the border crossings. That shows what is at stake in Europe, both politically and economically. We need a European solution to the refugee problem. That means the protection of the E.U.’s outer borders, a more equitable division of refugees, as well as the repatriation of people who don't qualify for protection.
This interview originally appeared in business weekly WirtschaftsWoche. To contact the author: firstname.lastname@example.org