Denmark's Margrethe Vestager has been a driving force of the European Commission's agenda, particularly in her role as Competition Commissioner. She talks to Global Conversation ahead of passing on the baton.
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00:00She is one of the EU's most powerful faces.
00:04The woman known for slapping US big tech giants with multi-billion euro fines.
00:10The woman who former US President Donald Trump called the tax lady.
00:15My guest today is Marguerite de Vestager,
00:18the Executive Vice President of the European Commission,
00:21who will soon wave goodbye to Brussels
00:24after being in charge of competition and competition and digital policies
00:28for almost 10 years.
00:33The European Commission President Ursula von der Leyen
00:36will soon unveil the names of the 27 candidates
00:40who could become the next European Commissioners.
00:43It appears that around 10 people out of the 27 are women.
00:49The European Parliament following the European elections in June
00:52experienced the biggest percentage drop in female representation
00:57since the first direct elections in 1979.
01:00How do you react to this backsliding?
01:03And what would you tell von der Leyen?
01:06Well, I think it's, unfortunately, it's a de-masking of the lack of efforts
01:13when it comes to equal opportunities and gender balance.
01:17Ursula von der Leyen, she asked a, I think, completely legitimate thing.
01:22Give me two candidates, a man and a woman.
01:25Then I will compose my commission so it's gender balanced
01:29and so that people have the competences needed.
01:32And I think, you know, every prime minister would say,
01:36I put my own government together.
01:38She's only asking for two people to choose from.
01:42And I think it's really a pity that member states do not follow through
01:48and gives her this opportunity to make the best possible commission
01:52and to make it gender balanced.
01:54Because we were making progress.
01:57We were, you know, also visually showing that a commission that is gender balanced
02:05is capable of doing, you know, unprecedented work
02:08as we did in this mandate under the leadership of Ursula von der Leyen.
02:12Why is it important to have more women inside the Berlin Wall?
02:15You just answered this question, but why?
02:18Well, first and foremost, you know, just a simple act of fairness
02:24that, of course, both genders should be taking part in leadership.
02:28Second, when you are in such dire straits as we are,
02:32we have multiple crises, we have things to deal with,
02:36the cost of living crisis, you know, the geopolitics, economic security.
02:41Of course, you should tap into the talent of both half of the population.
02:47And not focus on one part of the population only, the male part of the population.
02:53You need all the talent that you can have.
02:55And you also need different life experiences to be reflected in the commission.
03:00And you need to show boys and girls that this is what leadership looks like,
03:06men and women leading together.
03:09If we stick to the news right now, the far right is rising everywhere in Europe.
03:13We have seen this on Sunday in Germany
03:16with the IFD.
03:18So, do you fear that more governments with the far right in power,
03:24because this is what we are experiencing now,
03:27could totally undermine your efforts to regulate tech?
03:32Well, the good thing about where we are right now
03:35is that we have the legislation in place.
03:38We have really strong legislation, both the Digital Markets Act,
03:41to make sure that the market is open and fair,
03:44and the Dental Services Act to make sure that dental services are safe
03:49while preserving freedom of speech.
03:52And I think the important balance is they have been kept here.
03:56So, even if a government may be hostile to some of the efforts,
04:01you know, it's the law.
04:03And we are a union built on the rule of law,
04:06so I think it will be very, very difficult to sway the course that we have taken
04:11to make sure that dental services actually is a service
04:15and not something that you get addicted to,
04:18that makes your life difficult,
04:20or that is used to undermine our democracy.
04:22So, you don't fear if the far right is really in government right now,
04:28you don't fear the consequences of what it could mean for tech?
04:31Well, of course, if they manage to change national legislation,
04:37because the Dental Services Act doesn't say,
04:40this is wrong, this is right, this you can say, this you cannot say.
04:44The Dental Services Act say, you need to have this system in place.
04:47You need to make sure that your services cannot be harmful.
04:52You know, we've just had the back and forth with TikTok,
04:56who were presenting what we thought may be a harmful design,
05:01and they ended up not launching in Europe an addictive design.
05:06That are the obligations.
05:08But when it comes to what is harmful, you know, encouraging to terrorism,
05:13to violence, bomb recipes, child abuse, harmful content,
05:17hate speech for that matter, that is for member states to assess.
05:21And if a member state, of course, roll back and say,
05:24you can say whatever you want about minority,
05:27you can excite people to violence,
05:30then, of course, we are on uncharted territory.
05:34Because what we have been doing in the last decade is to make progress.
05:39You know, making hate speech forbidden,
05:41making sure that minorities can safely participate.
05:45But that is member states' competence.
05:47And, of course, they can roll it back.
05:49Many of the big antitrust rulings that you launched between 2014 and 2019
05:56were actually overturned in court.
06:00So there is a final judgment coming up on your appeal in the Apple case.
06:04And commentators have said that you took a less prominent role in the second mandate.
06:11So how do you look back on this?
06:15And what exactly did you learn from these setbacks?
06:19Well, there are very different sort of situations.
06:24In general, I must say, we win most of our cases.
06:28Where we have lost cases is when we have had state aid cases
06:32where we fear that member states have given, you know, sweetheart deals
06:37to some big companies that they don't have to pay the taxes
06:40that everybody else would have to pay.
06:43And one of the reasons why we had many more cases of that thought
06:47in the first mandate was, of course,
06:49that we wanted to see how the courts would assess this.
06:53Instead of just pressing on as fast as possible,
06:56we also need to see how will the court assess this.
06:59And, of course, in parallel to the specific cases on state aid for tax purposes,
07:05we have seen how member states have changed their own legislation
07:09to prevent loopholes, to prevent aggressive tax planning.
07:14And we have also seen the international community taking steps
07:18for a minimum level of effective corporate taxation of 15 percent
07:25for a sharing of revenue, so you pay your taxes where you actually make your revenue.
07:31So I think we have been making progress.
07:33But, of course, it would have been better for me, in question, to win the cases.
07:39But when you look at the antitrust cases and the cartel cases,
07:42here, to a very large degree, the courts confirm our approach.
07:46Going back to competition rules, since this is your topic,
07:51there is a debate right now in Europe on competition rules, competition policy,
07:57and the need maybe to revise it, to reconsider the way EU deals with its own competition policies.
08:04Do you think it is possible to strike the right balance
08:09between protecting the European consumer, which you have done for many years,
08:14and at the same time strengthening the European industry?
08:19How do you see this balance?
08:22Well, it depends a lot about what you mean about strength.
08:26Because, for instance, I see strength as having another supplier to choose
08:31if your preferred supplier fails you.
08:34That if one customer fails you, that you have other customers to turn to.
08:38And that is what competition gives you, that you have many suppliers to choose from,
08:43that you have access to markets where there are many customers to turn to if one is failing you.
08:49And for me, what we have seen is that if you're really competitive in the global market,
08:56it's because you have sort of exercised your competition muscle at home,
09:01because you're still being challenged.
09:03I think that there are a number of things that you can do in order to strengthen businesses.
09:08I think a good example are those sort of cross-border projects that we do.
09:12We have four in hydrogen, two in batteries, two in microelectronics, one in cloud, one in health.
09:18It's a total investment in cutting-edge innovation of €100 billion.
09:24So the same size as our Horizon research project, only in very specific sectors, cutting-edge innovation.
09:32And that helps European businesses to be able to deliver what we are asking from them.
09:38And I think that's a very good use of public funding.
09:42And that is a kind of industrial policy, if you want, that sort of helps the market move on, but doesn't limit competition.
09:50So I think it's really important not to see those two things as contradictions,
09:54but as seeing competition as one of the things that actually helps industry to be competitive in the global market.
10:01So do you think these competition rules should be reconsidered, should be revised?
10:07But it's really difficult to answer in general, because we have taken existing competition rules,
10:12and then we have sort of enlarged the scope, not only to look for price increase, but also look for lack of innovation.
10:21For instance, if two pharma companies want us to merge,
10:24well, then if there is a risk that the bigger one will close down the innovation in the smaller one in order to protect their cash cow,
10:33then of course we get concerned, because then consumers will not benefit from the innovation in this health sector,
10:40and patients may lose out.
10:42And that is existing old rules that we are keeping pushing to use in innovative ways.
10:48And that, of course, I think is important to continue.
10:50But the DSA asks platform to remove illegal content.
10:56What about harmful content?
10:58You mentioned it, but we talk about sexism, disinformation, could be hate speech.
11:04We know that from one country to the other, definitions can change.
11:09So what do we do with harmful content?
11:13Well, first and foremost, I think it's a very important realization that we have different cultures, also different political cultures.
11:21I think, for instance, in Denmark, the debate is much more sort of hard between people than in Sweden, where it's very civilized.
11:30And these cultural differences are among neighbors.
11:34So it's really important that you rely on the national setup.
11:38And when it comes to dealing with harmful content, we are happy if there is a code of conduct,
11:44that you use sort of soft law to manage what would otherwise be very difficult.
11:50Of course, in the end, what we are asking is to have a system put up so that you can deal with it.
11:55And then it will be for national courts eventually to say, well, this is actually harmful content.
12:00You need to deal with this. And this is maybe robust, maybe sometimes hurtful, but perfectly legitimate political discussion.
12:09The arrest of Telegram CEO Pavel Djurov in France, we know it has nothing to do with EU enforcement.
12:19But don't you think enforcement against big tech founders can only work if these bosses are personally liable,
12:32if you think that they should be the focus? And I'm speaking of Axis founder also Elon Musk.
12:40Well, I think for me, there are two different issues at stake here.
12:45So you have our legislation of competition law, the Digital Services Act, and then you have criminal law.
12:52And I think one should consider very carefully if you want to mix the two.
12:57I don't think that we will be more effective if we could sort of go for the CEO of a certain company.
13:05I think it's really important what we do here, where we have, you know, the cases that we open, the potential fines that we can impose.
13:13And I think the speed and the resources that we put into this, that is actually the key to produce the change that citizens are waiting for,
13:22because this is what they have been promised for themselves, for their minors, for their kids.
13:28The EU approach to enforcement of digital has been on a similar page as the Biden administration in the US.
13:38But what is the risk if, since we know we have elections in the US coming up now,
13:43what is the risk of if the Democrat candidate Kamala Harris loses to the Republican candidate we know who he is, Donald Trump?
13:52Don't you fear that this approach in the US will be reversed if it's Trump and Europe and America will be, will set on different tracks?
14:02Well, I find that very difficult to assess, because if you look at what Kamala Harris is saying as a candidate for the presidency,
14:12she's saying, well, listen, we need prices to be affordable.
14:17We need to look at the level of concentration to address the cost of living crisis, which is also a fact of life, unfortunately, in the US.
14:27I think that is a very broad interest, because many voters are faced with increasing prices,
14:33and they don't understand why prices, they don't come down just as fast as they went up.
14:39So to some degree, I think we may be sort of in a bipartisan move when it comes to this,
14:48because fair competition serves the voter in the role as a consumer.
14:54And that is not really political.
14:57That is, you know, addressing everyday grievances by people who lives a life where there are limitations to their budget.
15:05Speaking of AI, the EU's focus has been on regulation, as you know better than I do.
15:12But why exactly are there no EU champions when it comes to AI?
15:19Well, I would politely disagree with you, because we talk a lot about the AI Act for good reasons, since it's a global first.
15:27But we also have, you know, the AI investment program.
15:31So huge funds, private and public, goes into AI innovation.
15:36We're in the process of enabling smaller companies to use our system of hyperscale computers.
15:43We now have 10, which is, you know, state of the art globally, to use that for the training of AI.
15:51We have, you know, for instance, the French company Mistral, which is absolutely at par with others.
15:57And we have a lot of companies who develop AI that they put into their machinery.
16:02Can be, you know, health equipment, can be cars, other kinds of automotive, can be all kinds of productive machinery.
16:11So I think the European approach is a bit different to what you see in the US.
16:16But we can not only catch up, but we can also set an agenda for the use of AI,
16:23where people can actually trust the technology that is being used to serve them and not to control them.
16:30And I think that's a very strong future-proof European approach.
16:35But on the list of the big AI giants today, there's no French AI, Italian AI firm.
16:42How would you explain this in some ways?
16:45Well, first and foremost, the game is not over yet.
16:49There is still, I think, much more to come.
16:52One of the things that we need to secure in order for European AI businesses to have a fair chance is that they have access to capital.
17:00If you have not access to capital, you can not scale your business.
17:03And this is why, of course, we are pushing also for more public-private investment,
17:09with less hoops that you have to go through in order to access that investment,
17:14sort of under the headline of patient capital for urgent needs.
17:19And there is idle capital out there who needs, I think, the encouragement of public funding coming in and saying,
17:26we will share with you part of the risk for these huge investments.
17:31And then all that European talent may have a fair chance also to be part of the AI race.
17:38Margarete Vestager, there's a new commission that will emerge soon.
17:43What is your advice to the commissioner who will replace you?
17:50Well, I think when I came in, I'm not a competition lawyer.
17:55I'm educated as an economist, and I've been working in politics for most of my life.
18:00And what I tried to do was not to be too scared or too impressed by all the clever, clever lawyers around me,
18:12but to push for things that I found was really important.
18:16The fairness in the marketplace, that technology serves consumers and not the other way around,
18:23that market should be open and contestable.
18:26You know, because if you speak a language that you can understand yourself, then very often people can also understand it
18:32and they will support you in your efforts to make sure that we, in our role as consumers, are being well served by the market.
18:39OK, I know this question has been asked to you many times in the past months,
18:43but I'll try to frame it in a way that makes it a little more special in some ways.
18:51What do you wish for after when you leave the commission? What is your wish?
18:57I'm not saying what's next for you.
18:59No, I like that. That's a very nice way of framing it.
19:04Of course, you will know that we have very strict rules because we really do not have revolving doors.
19:10There's a two-year limitation and they are fully justified, I think.
19:16But I would hope that my ambitions on behalf of Europe still can find an outlet.
19:24I am ambitious and passionate about people having opportunities in a society that is getting still more digitalized.
19:33I think the geopolitics of this world is something that should encourage Europe to be much more engaged with the world around us.
19:43There are plenty of things that I would love to work with.
19:47Also, since there cannot be any difference, I look very much forward to it.
19:52You mentioned geopolitics. Maybe that's one of your interests.
19:55Thank you so much, Margaret.
19:57It was my pleasure. Thank you.