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.

 

 

Photo of Johan Ysewyn Johan Ysewyn

Johan Ysewyn advises on all aspects of EC, international and Belgian antitrust law, including merger control, compliance, cartel and leniency issues and abuse of dominance cases.  He acts as the head of the firm’s EU Competition group, working from our Brussels and London…

Johan Ysewyn advises on all aspects of EC, international and Belgian antitrust law, including merger control, compliance, cartel and leniency issues and abuse of dominance cases.  He acts as the head of the firm’s EU Competition group, working from our Brussels and London offices.

Mr. Ysewyn’s practice has a strong focus on global and European cartel investigations and he has represented companies from a range of sectors.  He is also one of the leading experts on EU state aid issues, working both for beneficiaries and governments.

He regularly speaks at conferences such as GCR, IBC, IBA, Chatham House and other industry events and has written for numerous legal publications.  He is recognised as a leading competition lawyer by Chambers, Legal 500 and other leading industry guides.  Mr. Ysewyn has acted as a non-governmental advisor to the International Competition Network (ICN).

Photo of Peter Camesasca Peter Camesasca

Peter D. Camesasca is a partner in Covington’s Brussels and London offices, with 25 years of experience in all major aspects of EU competition law. Peter also co-chairs the firm’s Foreign Direct Investment Regulation initiative, and, has a particular focus on in-…

Peter D. Camesasca is a partner in Covington’s Brussels and London offices, with 25 years of experience in all major aspects of EU competition law. Peter also co-chairs the firm’s Foreign Direct Investment Regulation initiative, and, has a particular focus on in- and outbound aspects of the Asia/Europe interface.

Peter’s experience includes cases under Articles 101, 102 and 106 TFEU, national and multijurisdictional merger and joint venture notifications (including FDI assessments), investigations by multiple enforcement authorities and global antitrust litigation and monopolization issues (including IP cross-over issues). In addition, he advises and litigates on horizontal and vertical cooperation issues, prepares and executes various compliance and dawn raid programs and participates in the installation of in-house training programs, and heads a vibrant private enforcement practice.

Peter has acted before the European Commission, the European courts, the German Bundeskartellamt, the UK Office of Fair Trading and the Competition and Markets Authority, the Belgian Competition Council, and various national courts.

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.