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18th Oct 2019

Breaking up tech giants is last resort, Vestager tells MEPs

  • MEPs grilled Margrethe Vestager on how she would unite law enforcement and legislating in one portfolio (Photo: European Parliament)

Rule-violating digital firms should only be broken up as a last resort and fines were a better way to keep them in line, the EU's anti-trust chief, Margrethe Vestager, told MEPs on Tuesday (8 October).

"Breaking up companies is a tool that we have available, it can be done. But the thing is, I have an obligation to use the least intrusive tool in order to restore fair competition," she said.

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The 51-year-old Danish politician spoke at a European Parliament hearing in her bid to become a European Commission vice-president in charge of the digital economy.

Vestager has already battled global tech giants, such as Amazon, Apple, and Google in her past five years as EU competition commissioner, earning herself the nickname "tax lady" from US president Donald Trump.

The idea of breaking up internet monopolists has emerged in the EU and in the US as a potential way of better regulating the firms.

Vestager also told MEPs that if there was no global agreement on digital taxes by the end of 2020, the EU should go ahead on its own.

"We need to make sure that digital companies pay their fair share of taxes. We want taxation rules to be based on global agreement, but if that is not possible by the end of 2020, we are prepared to act," she said.

France is so far the only EU country to have passed a digital services tax law.

French president Emmanuel Macron, who comes from Vestager's liberal political family, has also pushed the EU to take European-level action.

And Vestager told MEPs she "admired" EU countries were willing to go it alone if need be.

She promised a new round of state aid probes targeting EU countries' tax rulings if her nomination went forward.

"We still have open cases and we have just asked member states to give us a status on how they are applying tax rulings," she told MEPs on Tuesday.

Her recent cases include ordering US tech firm Apple to return €13bn in unpaid Irish taxes, a decision which both Apple and Ireland challenged at the EU's top court.

The EU court recently backed Vestager on Luxembourg's illicit tax breaks for Italian carmaker Fiat.

But it ruled against the European Commission on a case involving the Netherlands and US coffee chain Starbucks.

The Danish commissioner, who is a minor celebrity in Brussels, also took aim at online service firms such as transport company Uber and food delivery firm Deliveroo.

She said on Tuesday their drivers or cyclists ought to be able to form unions to defend their rights.

"Markets are changing fast and there are even bigger changes ahead. But human nature, basic motives like greed and fear don't change," Vestager said.

Some MEPs asked her if there was a conflict of interest in her new, double-hatted post.

Vestager is to both enforce anti-trust law and to draft new legislation and strategies for growth in the digital economy.

But she said would remain impartial in her role of competition tsar.

Anti-trust decisions were taken by the whole college of commissioners not by herself personally, she added.

And the commission's legal services would never allow political interference in anti-trust cases because they often had to defend them in the EU court.

Vestager promised MEPs to come up with a proposal on the EU's approach to artificial intelligence (AI) in the first 100 days of her being in office.

"We need rules to make sure AI is used ethically, to support human decision making and not to undermine it," she said, adding that part of it was making sure that humans did not program their own biases into AI.

"It is no smarter than the data you feed it, it is man-made, there is a danger we cement the inequalities we know already," Vestager said.

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