Apple and Google’s Nemesis Could Be the Next Face of Europe
She has forced Apple to repay $17 billion in taxes and fined Google over $9 billion for antitrust violations. And if the results at this week’s elections in Europe pan out for her, the woman that Silicon Valley has learned to fear could be on course for the top job in the European Union’s powerful bureaucracy.
Margrethe Vestager, the 51-year-old Dane who has been European Commissioner for Competition since 2014, stands to be one of the biggest winners from this week’s elections to the EU parliament, which start on Thursday and run through Sunday.
That’s because her caucus of centrists, known as the ALDE, is likely to emerge as kingmaker in a new parliament where—for the first time—the traditional blocs of center-right conservatives and center-left social democrats won’t command a majority. As such, they won’t be able to carve up the top jobs in the Commission and other EU institutions between themselves as they have in the past.
Anti-American?
The prospect of Vestager at the head of the European Commission may not go down well in certain Washington addresses.
“Your tax lady… she really hates the U.S.,” was how President Donald Trump reportedly described her to the current incumbent, Luxembourger Jean-Claude Juncker, at a fractious G-7 summit in Canada last year.
An avowed fan of The Daily Show, Vestager protests she’s anything but anti-American, yet her charge sheet is lengthy. In addition to her case against Apple and no less than three cases against Google, she has also forced tax repayments from Starbucks. She has fined Qualcomm $1.2 billion for squeezing rival chipmakers out of Apple’s supply chain. Last month, she forced Visa and Mastercard to cut some of their fees by 40% (and couldn’t help pointing out that U.S. consumers using their cards in Europe would be among the biggest beneficiaries). And she’s still weighing the possibility of an exhaustive probe into whether Amazon.com uses the data it gathers from the merchants it hosts to give its own merchandise an unfair advantage.
Cracking down—without bias
The extenuating factor is that Vestager has wielded the same power to offend all manner of non-Americans too.
She has forced Russia’s overbearing gas giant Gazprom to rewrite supply contracts to reduce the political leverage it has over EU members in central and eastern Europe (although the lack of a fine angered some of them).
She fined the European truck industry over $4 billion for fixing prices and is about to slap Germany’s carmakers with more fines for conspiring to create the diesel emissions scandal. The Commission alleges they agreed to keep more effective (but expensive) after-treatment systems off the market in favor of cheaper, dirtier technology. BMW has already said it will likely take a charge of over $1.1 billion.
Most eye-catchingly, Vestager caused howls of outrage this year in the EU’s two most powerful states, Germany and France, by refusing to let the rail businesses of Siemens and Alstom merge, for fear that they would shore up their position on world markets by gouging their European clients. Tellingly, Paris and Berlin didn’t dispute her arguments, only her priorities.
As such, Vestager has built a reputation for standing up for consumers, without discrimination, against powerful vested interests.
“She has shown willingness to use power at a European level to address some of the high political challenges of the day,” says Susi Dennison, a senior fellow at the European Council on Foreign Relations. “She has not chosen the path of least resistance.”
A people’s champion
Vestager’s portfolio has given her a perfect stage to showcase herself as a champion of normal people, a rarity in an EU often criticized for being aloof and removed from its citizens’ concerns.
Although Commissioners are supposed to be impartial technocrats, she appears not to have lost the career politician’s instinct. Is it coincidence—in an election year—that she recently stopped Anheuser Busch InBev from selling beer at inflated prices in the Netherlands, and fined Nike for overcharging soccer fans for replica jerseys?
But her career now depends on the arcane processes of EU politics. The Commission president must be nominated by the government heads of the member states and approved by the EU parliament. The likeliest outcome is still that the first nominee will come from the largest bloc in the parliament, the center-right European People’s Party (EPP) that includes the Christian Democrats of German Chancellor Angela Merkel. The EPP lawmakers’ choice is the German Manfred Weber.
However, Merkel has reserved the right to back someone else, knowing that many other top positions in Europe need to be filled this year, and that they can’t all go to Germans. The roles must be balanced between big and small countries, between north and south, between the early western European members and newer members from the former Soviet bloc. Among the jobs up for grabs is the powerful presidency of the European Central Bank, on which Merkel’s former economic adviser Jens Weidmann has set his sights.
A default choice?
In that kind of environment, Vestager ticks a lot of boxes for a lot of people—if, sometimes, only by default.
Unlike Weber, she has experience of executive power; unlike Frans Timmermans, the Dutchman who is the Social Democrats’ favored candidate, her bloc is likely to expand its share of the vote this week. Unlike Weber and the EU’s Brexit negotiator, the Frenchman Michel Barnier, she comes from the small EU state of Denmark that can’t bend the EU’s power to its own national interest.
The fact that her country is not a member of the euro zone could help disarm the suspicion that the EU’s most important jobs are reserved for paid-up federalist fanatics. That will be important given that the election’s biggest winners are set to be nationalist and populist parties.
Last, but by no means least, Vestager is not male. The Commission has never had a female president in 62 years, and in a blog post on Thursday, leaders of the EU called for voters to elect a European Parliament that is “representative of women and men in equal numbers” and for a gender-balanced European Commission.
None of this means she is a shoo-in. The only thing that is certain is that, as Dennison says, “there will be a lot of horse-trading” as the new power structure takes shape over the next six months.
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