“To break up a company, to break up private property would be very far reaching and you would need to have a very strong case that it would produce better results for consumers in the marketplace than what you could do with more mainstream tools,” she warned this weekend, speaking in a SXSW interview with Recode’s Kara Swisher. “We’re dealing with private property. Businesses that are built and invested in and become successful because of their innovation.”
Vestager has built a reputation for being feared by tech giants, thanks to a number of major (and often expensive) interventions since she took up the Commission antitrust brief in 2014, with still one big outstanding investigation hanging over Google.
But while opposition politicians in many Western markets — including high profile would-be U.S. presidential candidates — are now competing on sounding tough on tech, the European commissioner advocates taking a scalpel to data streams rather than wielding a break-up hammer to smash market-skewing tech giants.
“When it comes to the very far reaching proposal to split up companies, for us, from a European perspective, that would be a measure of last resort,” she said. “What we do now, we do the antitrust cases, misuse of dominant position, the tying of products, the self-promotion, the demotion of others, to see if that approach will correct and change the marketplace to make it a fair place where there’s no misuse of dominant position but where smaller competitors can have a fair go. Because they may be the next big one, the next one with the greatest idea for consumers.”
She also pointed to an agreement last month, between key European political institutions on regulating online platform transparency, as an example of the kind of fairness-focused intervention she believes can work to counter market imbalance.
The bread and butter work regulators should be focused on where big tech is concerned are things like digital sector enquiries and hearings to examine how markets are operating in detail, she suggested — using careful scrutiny to inform and shape intelligent, data-led interventions.
Albeit ‘break up Google’ clearly makes for a punchier political soundbite.
Vestager is, however, in the final months of her term as antitrust chief — with the Commission due to turn over this year. Her time at the antitrust helm will end on November 1, she confirmed. (Though she remains, at least tentatively, on a shortlist of candidates who could be appointed the next European Commission president.)
The commissioner has spoken up before about regulating access to data as a more interesting option for controlling digital giants vs breaking them up.
And some European regulators appear to be moving in that direction already. Such the German Federal Cartel Office (FCO) which last month announced a decision against Facebook which aims to limit how it can use data from its own services. The FCO’s move has been couched as akin to an internal break up of the company, at the data level, without the tech giant having to be forced to separate and sell off business units like Instagram and WhatsApp.
It’s perhaps not surprising, therefore, that Facebook founder Mark Zuckerberg announced a massive plan to merge all three services at the technical level just last week — billing the switch to encrypted content but merged metadata as a ‘pro-privacy’ move, while clearly also intending to restructure his empire in a way that works against regulatory interventions that separate and control internal data flows at the product level.