A PYMNTS Company

Vestager’s firm hand is an opportunity not a threat to EU tech

 |  November 4, 2019

By Martin Sandbu, Financial Times

Margrethe Vestager is using her renewed and expanded mandate for all it is worth. The EU competition commissioner, who will be promoted to vice-president of the incoming commission in charge of digital policy, is contemplating a new move against digital market abuse. In future, large internet companies accused of anti-competitive behaviour may find the burden of proof is on them to show their conduct benefits consumers, rather than on authorities to prove harm.

What does the commission gain from such a policy change? One obvious answer is speed. Ms Vestager “is doing it to show we can have smart regulation, meaning that you can be fast enough to act upon market cases that require immediate action”, says Francesca Bria, a digital policy adviser to the UN and the commission. “This makes a lot of sense. If you intervene too late you do not have the tools to enforce your regulation and the problem may have moved somewhere else.”

The policy would dovetail with Ms Vestager’s revival of so-called interim measures to stop alleged market abuse during an investigation. That was a “very welcome” decision, says Thomas Philippon, a New York University finance professor and author of a book arguing Europe’s antitrust policy has overtaken America’s. “There is no presumption that the company is right or wrong, but when there is uncertainty and time is of the essence then it’s appropriate for regulators to have this instrument . . . the burden of proof argument is very similar in spirit.”

Requiring tech companies to show how their behaviour benefits users may have consequences beyond mere speed. It could address what Ms Bria calls a “very strong paradox” — that other industries, such as “Big Pharma or telecoms or big monopolies”, share data with authorities “for competition inquiries and analysis” whereas “Big Tech [companies] are sitting on big amounts of data” but resist sharing it.

Continue Reading…