Vestager: Regulate data access instead of splitting up tech giants

Margrethe Vestager, Commissioner for Competition at the European Union, would rather have access to data regulated for digital giants than have these companies split up. That’s what she said in an interview at the SXSW festival in Austin, Texas.

Breaking up a business goes a long way. In this case, you need to have a strong argument that it delivers better results in the market for consumers than what you could do with more regular tools. We’re dealing with private property. Companies that have been built up, that have been invested in and that have become successful because of their innovation, according to Vestager. She stands in a different position from, for example, the American presidential chancellor Elizabeth Warren, who wants to split up digital giants.

Fair marketplace

If we are talking about the far-reaching proposal to split up companies, this would be a last resort for us from a European perspective. We now focus on antitrust cases, abuse of dominant positions, product matching, self-promotion and the demotion of others to see if that approach will correct and change the marketplace. We want to make it a fair marketplace, where there is no abuse of dominant positions and where smaller competitors have a fair chance. Because maybe they are the next big thing, the next with the best idea for consumers, Vestager goes further.

According to her, the EU is currently investigating how data access will change the market. Among other things, she is interested in the possibility of giving another access to data, if the person who holds the data also has the means for innovation. Assuming that the big players are the most innovative at the same time is not an option in her opinion.

A number of European regulators seem to be following Vestager. For example, last month the German Federal Cartel Office (FCO) announced a decision against Facebook, which aims to limit how the social media giant can use data from its own services. This step would take place at data level, without Facebook being forced to separate and sell business units. Think of Instagram and WhatsApp. In response, Facebook founder Mark Zuckerberg would have announced his plan to merge all three technical services.

Debate

The EU is currently looking at how data is used on social media: The good news is that the debate on competition rules is now really getting off the ground. When I visited people on The Hill before and talked to them, I felt a new kind of interest and curiosity about what competition can mean for society. Because if you have fair competition, then you have markets that serve the citizen in our role as a consumer and not the other way around.

A reform of the global tax system is also under consideration, so that digital companies pay a fair share compared to traditional companies. If you compare figures, we see that digital companies pay an average of nine percent tax, whereas traditional companies pay an average of 23 percent. However, they are in the same market for capital, for skilled workers, sometimes competitive for the same customers. So this is clearly not fair, concludes the Competition Commissioner.

New players

Having all the technology, but none of the positive social insights and guidelines, is something that Vestager does not like to see happen. However, in her view, legislators should be prepared to take sufficient steps in the field of taxation. In addition, they must give access to data and regulate fairness in the market. Vestager: We should also develop technology to have new players, because we just have to see what will happen to quantum computing or blockchain. But also which other applications will soon be available to everyone concerning new technology. I think it has many promises, but only if our democracy gives direction. Then you have a positive result. ”

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