EU Commissioner for Competition
The Google fright resigns: why Margrethe Vestager stops and who follows her
Margrethe Vestager was also called “Iron Lady”.
© dpa / Virginia Mayo
She was considered one of the most powerful women in Brussels. As EU competition commissioner, Margrethe Vestager imposed billions in fines on corporations such as Google, Apple and Amazon. But in the end it became quiet around her
She was one of the best-known EU politicians and was considered one of the most powerful women in Europe. In 2019, the liberal politician was even traded as a possible Commission President. But in this legislature, Vestager increasingly disappeared from the European stage.
For almost ten years, the 55-year-old managed the fortunes of the European competition authority. Even under Commission President Jean-Claude Juncker, she began to take action against the tax arrangements of the EU member states and put an end to tax evasion by large corporations. Vestager initiated proceedings against low-tax countries such as Luxembourg, Ireland and the Netherlands and sentenced companies such as Amazon, Starbucks and Apple to pay high back taxes. The idea of taking action against tax breaks using EU state aid rules. came from her predecessor. Vestager, however, put them into practice.
Billions in fines against Google
Vestager also took on powerful corporations as an antitrust fighter. Example Google: In 2018, the Danish imposed a record fine of 4.3 billion on the US company. Your accusation: With its Android operating system, the group is abusing its dominant position. It is the highest fine ever imposed on a single company and not even the first billion-euro fine Vestager imposed on the group. Already in 2017, Google had to pay a fine of 2.42 billion. Both times, the US company went to court against Vestager’s fine and lost.
Vestager earned the nickname “Iron Lady” for her harsh actions. When the EU Commissioner accused a company of abuse of power, it was clear that she meant business. Vestager took on the Russian company Gazprom, fined Mastercard 570 million and launched antitrust proceedings against Amazon and Apple.
“We Danes are direct. We’re not always so polite,” Vestager told Times Magazine in 2015. That didn’t always make her popular. Former US President Donald Trump accused her of hating the United States. Your actions against Apple’s tax practices are “political rubbish” complained its boss Tim Cook. The commissioner was doing “everything wrong for Europe,” Siemens boss Joe Kaeser scolded when Vestager opposed the merger of Alström and Siemens in 2019.
Vestager’s predecessor, the Spanish commissioner Joaquín Almunia, was much more gentle with large corporations. His investigations into companies mostly ended with a settlement behind closed doors. Not Vestager. If you invited them to the press conference, the hall was usually full. Their announcements were eagerly awaited. The question against whom the EU Commissioner would now act was in the air. In 2019, the Dane was at the peak of her power. The Liberals are hoping that she will become Commission President.
Recently it became quiet around Vestager
But Vestager built her legacy primarily under Jean-Claude Juncker. Recently, what was once the strongest woman in Brussels has become increasingly scarce. Under Commission President Von der Leyen, the balance of power within the European Commission has changed. Although Vestager received the title of “Executive Deputy Commissioner”, she increasingly disappeared from the political scene. Maybe she was pushed out by this one too. Not Vestager, but the charismatic Frenchman Thierry Breton is the face of the most important digital legislative initiatives of this legislature, such as the Digital Markets Act and the Digital Services Act. Both serve to curb the power of digital platforms.
Vestager has also suffered several embarrassing defeats in recent years. The EU courts overturned their tax decisions against Amazon, Apple and Fiat. Ultimately, the corporations did not have to pay any taxes, and Vestager’s attempt to use the EU state aid rules to counteract tax breaks in favor of large corporations failed. The EU Commissioner received another setback in July. Her decision to appoint American Fiona Scott Morton as chief economist at the EU competition authority drew criticism. Scott Morton has worked in the past as a consultant for the corporations that she would oversee as Chief Economist. The American ultimately gave up the job, the debacle damaged Vestager’s reputation.
Shortly before the European elections, Vestager’s profile has faded. Surely no one would give her a chance to preside over the Commission today. The presidency of the EIB may be a chance for a graceful exit ahead of the upcoming European elections.
In the meantime, the Czech Vera Jourová will be responsible for steering and coordinating the digital dossiers, while the Belgian Didier Reynders will take on the competition dossiers. Big announcements are no longer to be expected so shortly before the end of the legislature. With Justice Commissioner Didier Reynders, Ursula von der Leyen has also appointed one of her weaker commissioners as head of competition. With his most important dossier of this legislature, the Supply Chain Act, the President of the Commission put Thierry Breton at her side halfway. Reynder’s proposal would have made companies too responsible. In this sense, Reynders can hardly be expected to take strict action against the abuse of power by corporations.
However, the appointment of Vestager as President of the European Investment Bank is by no means a sure-fire success. Vestager must prevail against the Spanish economy and finance minister, Nadia Calviño, who through her office is one of the governors of the bank. The first debate of EU finance ministers on the future governance of the bank will take place next week. However, a decision is not yet to be expected. If Vestager does not make it to the top of the EIB, she can resume her post as EU Commissioner.