After her confirmation hearing in front of the European Parliament on Tuesday 8 October, Magrethe Vestager looks certain to remain as Competition Commissioner for a second term and to combine that with a broader responsibility for digital policy development. Both the second term and the combination of the competition portfolio with a policy brief are unprecedented in recent decades.

Several key points, including the way in which she intends to manage digital matters and a potential conflict of interest, emerged from the hearing.

On her outlook on EU competition: Vestager emphasised that the competition landscape in the EU was a values-based system and that in her view competition rules “can make markets work for people”.

… and on her looking out for EU competition: Vestager said she was determined to ensure, through public procurement and other tools, that foreign state ownership and subsidies do not undermine fair competition in Europe.

On remedies, breakups are hard: Vestager stressed that taking measures such as breaking up companies was very much a last resort and that she had an obligation to use the least intrusive tool possible to secure the desired outcome.

… and other remedies may become available: Separately she also suggested that the Commission might be able to adopt some of the remedies-based strategies currently used by the UK Competition and Markets Authority (“CMA”). The CMA uses it powers to impose market-wide remedies without actually finding specific competition law infringements or fining companies. Vestager referred to these tools when questioned on how DG COMP could speed up the Commission’s reactions to avoid distortion in the single market, enabling EU companies to compete with US tech giants.

On taxation, global agreements are the carrot: Vestager said she hoped that the Commission could reach some sort of global agreement on digital taxation, following the failure earlier this year to implement a digital tax. However, Vestager stressed that if no effective global agreement can be reached by the end of 2020, the EU should be willing to act alone on coming up with a digital tax.

… and State aid enforcement is the stick: Vestager confirmed that, in the meantime, the Commission still had open state aid cases and has just asked Member States to provide the Commission with a status on how they are applying tax rulings.

On digital, move quickly: Vestager pledged that, within her first 100 days in office, she would publish proposals for the Commission’s framework for ethical design and application of artificial intelligence.

… and update regulations: Vestager also outlined plans to introduce a new Digital Services Act that would update liability and safety rules for digital platforms. She noted that the last piece of relevant legislation dated from 2000. Vestager has not yet worked out the details of a new Digital Services Act, but suggested that it should ensure that consumers’ fundamental rights are safeguarded. For instance, Vestager warned of “surveillance capitalism”, i.e., search engines such as Google tracking internet users’ personal preferences and utilising the information for ad-driven businesses. 

On potential conflicts of interest: Some MEPS – in particular from the European People’s Party (EPP) – expressed concerns that there could be a potential conflict of interest between her competition enforcement role in DG COMP and her digital policy role. Vestager said that this had been the first question she had asked herself on being offered the dual role, but she concluded that it would not be a problem. She indicated that “independence in law enforcement is non-negotiable”; implying she will abide by this core principle. Further, she observed that the entire College of Commissioners scrutinises the decisions of DG COMP, saying “every decision is subject to not one time but two times scrutiny if need be”.

… not everyone was convinced: This failed to satisfy the EPP and, after the hearing, Esther de Lange MEP (EPP Group Vice-Chairwoman responsible for Economy and Environment) released a statement saying that Vestager had not convinced the EPP that she would not have a conflict of interest.

And on next steps: The Conference of Presidents was to decide on 17 October if the European Parliament has received sufficient information to declare the hearing process for all Commissioners closed and, if so, whether a plenary vote should follow on 23 October.

… the best laid plans: The timetable has been thrown into doubt by Parliament’s rejection of three countries’ nominees, in particular France’s Sylvie Goullard. This may lead to the current Commission term being extended beyond the currently expected 31 October.

 

 

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Photo of Johan Ysewyn Johan Ysewyn

Johan Ysewyn is widely respected as a highly skilled European competition lawyer, advising on complex competition issues, including on merger control, anti-cartel enforcement, monopolisation cases and other conduct investigations. He acts as Co-Head of the firm’s Global Competition group and as Managing Partner…

Johan Ysewyn is widely respected as a highly skilled European competition lawyer, advising on complex competition issues, including on merger control, anti-cartel enforcement, monopolisation cases and other conduct investigations. He acts as Co-Head of the firm’s Global Competition group and as Managing Partner of the Brussels office.

Clients turn to Johan when they need cutting-edge competition and regulatory advice. He has been advising some of the world’s leading companies for over 30 years on their most complex competition issues. Johan is “an exceptional lawyer who is solution-oriented, has a remarkable ability to rapidly understand our business and has excellent reactivity.” (Chambers Global) Johan “attracts considerable praise for his reliable practice, as well as his great energy and insight into cartel proceedings.” (Who’s Who Legal)

Johan represents clients from around the world in dealings with competition authorities as well as in court litigation. He has in-depth knowledge of regulatory procedures and best practices as well as longstanding relationships with key regulators, in particular at the European Commission. He has also an active advisory practice covering a range of areas of interest to corporates, including the interplay between ESG goals and competition law, the impact of competition law enforcement on digital markets and broad strategic compliance issues.

Johan’s experience spans many industry sectors, with recent experience in telecoms and information technology, media, healthcare, consumer goods, retail, energy and transport. He has advised on several of the most major merger investigations in recent years. In addition, he has represented clients in many conduct investigations.

Johan’s practice also has a strong focus on global and European cartel investigations. He has acted for the immunity applicants in the bitumen and marine hose cartels, and acted for defendants in alleged cartels in financial services, consumer goods, pharmaceuticals, chemicals, consumer electronics and price benchmarking in the oil sector. He has acted for the European Payments Council in the first European Commission investigation into standardisation agreements in the e-payments sector. Johan has written and lectured extensively on international cartel and leniency-related issues. He co-authors the loose-leaf European Cartel Digest and lectures on cartel law and economics at the Brussels School of Competition.

Johan is also one of the leading experts on EU State aid issues, working both for beneficiaries and governments. He has advised a number of leading banks and governments, as well as represented major European airlines. From the cases that can be publicly disclosed, he has been involved in the Fortis, KBC, Dexia, Arco, Citadele, airBaltic and Riga Airport State aid cases.

Photo of Kevin Coates Kevin Coates

Kevin Coates advises clients on critical antitrust matters drawing on his extensive public sector experience in the Directorate-General for Competition of the European Commission (“DG COMP”), most recently as Head of a Cartel Unit.

His practice has a particular focus on advising companies…

Kevin Coates advises clients on critical antitrust matters drawing on his extensive public sector experience in the Directorate-General for Competition of the European Commission (“DG COMP”), most recently as Head of a Cartel Unit.

His practice has a particular focus on advising companies in the electronics, technology, software and e-commerce sectors.

Mr. Coates advises on all aspects of EU, UK and international competition law, including merger control, compliance, cartels and leniency, and abuse of dominance.

Mr. Coates served as Head of a Cartel Unit at the Directorate-General for Competition (“DG Comp”) at the European Commission between 2012 and 2016. Prior to this, he held several positions within DG Comp, over nearly 20 years in total, including advising the Director General of DG Comp on policy and communications issues, and overseeing competition cases in the telecoms and media sectors. While working for the Director General he was one of the team that produced the Guidance on Enforcement Priorities under Article 102.

He was also a visiting research fellow at NYU School of Law in 2009-2010.

Prior to joining DG Comp, he served as in-house Counsel at AOL Europe where he was responsible for antitrust and regulatory issues for AOL subsidiary companies in the UK, Germany, France and the Netherlands.

Mr. Coates is the author of “Competition Law and Regulation of Technology Markets” published by Oxford University Press in 2011.

Mr. Coates is co-chair of Covington’s Internet of Things (IoT) group, and leads the firm’s Brexit Task Force.