Short Reads

Margrethe Vestager to play matchmaker between enforcement and regulation

M. Vestager to play matchmaker between enforcement and regulation

Margrethe Vestager to play matchmaker between enforcement and regulation

03.10.2019 NL law

Current Competition Commissioner Margrethe Vestager may face even greater challenges in the next European Commission. President-elect Ursula von der Leyen has not only nominated Vestager for a second term as Commissioner for Competition, but has also asked her to coordinate the European Commission's digital agenda. As a result, Vestager may soon be tackling digital issues through competition enforcement whilst also proposing additional regulation to deal with these (and related) issues pre-emptively.

Tech companies may therefore be faced with strong competition enforcement, complemented by additional regulation. However, the European Parliament must first give its consent to the entire College of Commissioners.

The mission letter

According to von der Leyen's mission letter, Vestager will combine her responsibility for the EU's competition policy with the task of getting Europe fit for the digital age. Even though it is still unclear how Vestager will manage these dual functions in practice, the duality is likely aimed at generating more alignment between closely linked issues, particularly now that general market knowledge gained when performing one task will be put to use in achieving goals under the second task.

With regard to her digital responsibilities, the mission letter states that Vestager will need to ensure that "Europe fully grasps the potential of the digital age and strengthens its industry and innovation capacity". To do so, Vestager will need to:

  • co-lead on a new long-term strategy for Europe's industrial future to maximise the contribution of investment in R&D supporting the EU's policy objectives,
  • ensure cross-fertilisation between civil, defence and space industries,
  • co-lead work on a new SME strategy,
  • coordinate work on a European approach on artificial intelligence and exploring how non-personalised big data can be used to develop new technologies and business models,
  • coordinate work on upgrading liability and safety rules for digital platforms, services and products as part of a new Digital Services Act, and
  • coordinate work on digital taxation.

In terms of competition, Vestager's mission is to ensure that the EU's competition policy and rules are fit for the modern economy, are vigorously enforced and contribute to a strong European industry. The mission letter mentions that Vestager can achieve this by:

  • strengthening competition enforcement across all sectors,
  • evaluating and reviewing EU competition rules,
  • launching sectoral inquiries into new and emerging markets,
  • stimulating businesses to invest, innovate and grow by using EU state aid rules,
  • developing tools to tackle the distortive effects of foreign state ownership and subsidies, and
  • proactively sharing relevant general market knowledge within the Commission, notably in the digital sector, to "help ensure new legislative proposals contribute to fair and open competition in the single market".

Upcoming additional regulation?

Since Vestager has stated that she agrees that competition enforcement alone will not suffice to face the current challenges in the digital sector, additional regulation is likely to be one of the first items on Vestager's new agenda. In a recent speech, she mentioned there may be a need for "broader rules to make sure that the way companies collect and use data doesn’t harm the fundamental values of our society".

Additional rules on data collection and use, complementing the recently adopted P2B Regulation on fair treatment by platforms, may therefore be on their way. More "traditional" antirust regulations, such as the Vertical Block Exemption Regulation and the rules on horizontal co-operation agreements – each currently under review – may also be tweaked or revised. It is still unclear whether the mission letter's reference to a strong European industry intends to provide more leeway to include industrial policy considerations in EU merger control rules.

Tech companies as well as more "traditional" businesses may brace themselves for the next Commission's upcoming stronger competition enforcement and additional regulation.

This article was published in the Competition Newsletter of October 2019. Other articles in this newsletter:

 

Team

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