Big Tech’s Toughest Opponent Says She’s Just Getting Started

Big Tech’s Toughest Opponent Says She’s Just Getting Started
By: WNG NYT Posted On: November 19, 2019 View: 68

Big Tech’s Toughest Opponent Says She’s Just Getting Started

BRUSSELS — Margrethe Vestager spent the past five years developing a well-earned reputation as the world’s top tech industry watchdog. From her perch overseeing Europe’s competition rules, she fined Google more than $9 billion for breaking antitrust laws, and forced Apple to pay about $14.5 billion for dodging taxes.

Now she says that work, which made her a hero among tech critics, did not go far enough. The biggest tech companies continue to test the limits of antitrust laws, behave unethically and push back against government intervention, she said.

But she said the public’s growing skepticism about technology has given her an opportunity for a tougher approach.

“In the last five years,” Ms. Vestager said in an extended interview, “some of the darker sides of digital technologies have become visible.”

So Ms. Vestager, a 51-year-old former Danish lawmaker, is doubling down. She has signed on for a rare second five-year term as the head of the European Commission’s antitrust division, and assumed expanded responsibility over digital policy across the 28-nation bloc.

With the new power, she has outlined an agenda that squarely targets the tech giants. She’s weighing whether to remove some protections that shield large internet platforms from liability for content posted by users. She is also working on policies to make companies pay more taxes in Europe and investigating how the companies use data to box out competitors.

Ms. Vestager has pledged to create the world’s first regulations around artificial intelligence and called for giving collective bargaining rights to so-called gig economy workers like Uber drivers. The push comes on top of an investigation into Amazon’s use of data to gain an edge on competitors that had already started, and her look into accusations of unfair business practices by Facebook and Apple.

“She has these accomplishments, but she didn’t get as much as she wanted,” said David Balto, a former lawyer in the Justice Department’s antitrust division whose clients now include large tech companies. “Now she can be more aggressive.”

But Ms. Vestager’s agenda amounts to a wish list. Her success will depend on support and collaboration from other European officials who are already grappling with challenges like Britain’s exit from the European Union, the rise of populism and fraying diplomatic relations with the United States.

It will require standing up to relentless resistance from the tech companies, too.

“One of the important things is, of course, to prioritize because otherwise you will be in the process of back and forth for a very, very long time,” Ms. Vestager said.

In person, Ms. Vestager’s manner defies her tough enforcer reputation. She is unfailingly polite, meeting guests by offering tea and apologizing for a lingering cold. (She assured everyone that she had just washed her hands.)

She is a challenging interview subject, prone to filibuster and rarely veering from oft-repeated talking points. A skilled politician, she projects modesty while not exactly turning away from the spotlight. A sign in the hallway outside her office says, in Danish, “Vestager Street.”

She is also fast to shrug off criticism, including by numerous tech executives and President Trump, that she has been unfair to American tech companies.

Tim Cook, Apple’s chief executive, called the penalty against his company in 2016 for skirting Irish taxes “total political crap.” Google is appealing her three decisions against the company.

“She hates the United States,” President Trump said in a television interview in June, “perhaps worse than any person I’ve ever met.”

Ms. Vestager feigns to hardly remember the president’s comment. “Since I know the very good relationship I have with the United States, then he must only meet people who really like the States if I am the one who likes you the least,” she said.

If anything, American authorities are coming around to share her tech skepticism. Federal, state and congressional investigators are scrutinizing the tech industry over unfair business practices. Ms. Vestager said she saw opportunities to collaborate, but was waiting to see how the inquiries unfolded.

“Obviously it’s very interesting to see what will come of it,” she said.

As the United States begins to investigate Amazon, Apple, Facebook and Google, some American officials are trying to learn lessons from Europe’s efforts. The investigations of Google and others took years to complete, giving the companies extra time to solidify their dominance. And once the inquiries were completed, critics said, the penalties focused on large fines that the companies could easily afford, rather than enforcing structural changes that would restore competition.

Luther Lowe, the head of public policy at Yelp, the reviews website that has been a frequent critic of Google’s behavior, praised Ms. Vestager’s efforts. But he said companies like Yelp “have to date still not seen a shred of practical relief, despite having prevailed in concept.”

Ms. Vestager needs to use all powers at her disposal, he said, “or be granted new ones.”

Ms. Vestager said some of the criticism was valid. She is taking steps to speed up investigations and is applying a rarely used rule known as “interim measures,” that acts as a cease-and-desist order for companies to stop acting a certain way while an investigation can be conducted.

She will play a leading role in the European Union’s debate over a new Digital Services Act, which could bring sweeping reforms to how the internet operates, including forcing online platforms to remove illegal content or risk fines and other penalties. Facebook, she said, must be quicker to stop the spread of false and misleading information, violent material and hate speech.

“You have to take it down because it spreads like a virus,” she said. “But if it’s not fast enough, of course, eventually we will have to regulate this.”

And she remains focused on whether the largest technology companies squeezed out businesses that rely on them to reach customers. Amazon is under investigation for mistreating third-party sellers that offer products similar to what it sells. Apple is being questioned over accusations that it uses the App Store to harm rivals such as Spotify.

“Some of these platforms, they have the role both as player and referee, and how can that be fair?” she asked. “You would never accept a football match where the one team was also being the referee.”

In Europe, a broader debate is underway about a lack of homegrown tech giants. President Emmanuel Macron of France, for instance, has called for more government support of European companies. Ursula von der Leyen, the new head of the European Commission, who appointed Ms. Vestager, has called for Europe to achieve “technological sovereignty.”

The companies facing Ms. Vestager’s scrutiny are warning about taking regulation too far.

Christian Borggreen, vice president of the Computer and Communications Industry Association in Brussels, a trade group representing Apple, Google and other companies, warned that new laws could put Europe at a disadvantage.

“We hope future E.U. legislation will be evidence-based and never become an excuse for protectionism,” he said.

Ms. Vestager has said that European companies must compete on their merits.

“One of the main reasons that U.S. tech companies are popular in Europe is that their products are good,” she said. Her job, she added, has been to step in when companies “cut corners.”

Ms. Vestager said Europe had a different view of technology than the wide-open policies of the United States and government control of China. Europe, she said, must forge its own approach.

“Market forces are more than welcome, but we do not leave it to market forces to have the final say,” she said. “Markets are not perfect.”

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