By Valentina Pop, Wall Street Journal
Margrethe Vestager made a name for herself as Europe’s top antitrust enforcer by slapping record fines on U.S. tech companies. Now she says those fines don’t work.
As she prepares to start an unprecedented second term as the European Union’s competition commissioner, this time with added powers as the EU’s digital-economy policy maker, Ms. Vestager is shifting her focus from fining giants to preventing market abuses.
Fines are “not doing the trick,” she told EU lawmakers recently, despite having hit Alphabet Inc.’s Google with penalties totaling $9.4 billion in recent years. “We have to consider remedies that are much more far-reaching.”
Ms. Vestager already has the power to break up companies as a last resort, a step some Democratic presidential candidates including Sen. Elizabeth Warren have advocated. Ms. Vestager said that isn’t her intent. “My obligation is to do the least-intrusive thing in order to make competition come back,” she said.
Instead, she pointed to national competition authorities in the U.K. and the Netherlands, which have the power to reorganize a marketplace before consumers or competitors suffer. She said the two countries have “tools that could be considered, to reorganize before harm is done.”
Ms. Vestager should get similar powers, Dutch Competition Authority Chairman Martijn Snoep told a recent conference in Brussels. “We don’t need tools to cure yesterday’s problems,” he said of the Netherlands. “Tools should be aimed at preventing [bad] behavior.”
The approach departs from traditional punitive remedies because it addresses market conditions without casting blame. Britain’s Competition and Markets Authority can order companies to divest parts of a business in order to improve competition, “but there’s no liability, no fines,” said Mike Walker, chief economic adviser at the CMA, at the same conference.
The CMA in July launched an inquiry into online platforms and their advertising businesses. A previous inquiry into the auditing sector led in April to the conclusion that audit firms Deloitte LLP, Ernst & Young LLP, KPMG LLP and PricewaterhouseCoopers LLP should separate their auditing and consulting businesses.