In conversation with Margrethe Vestager
Reflecting on the past and future of competition policy.
What’s up EU met Margrethe Vestager on September 13, a few days before Ursula von der Leyen is set to unveil her picks as commissioners for the new mandate. The next executive team should assume office in November or December, depending on how parliamentary hearings go.
After two terms as Commissioner for Competition, Vestager will soon be leaving her office on the twelfth floor of the Berlaymont. The 1960s asymmetrical cross-shaped building houses the European Commission, and owes its name to the Sisters of the Berlaymont convent. Around 850 antitrust officials of the Directorate General for Competition work in Madou Tower, a 15-to-20 minute walk from the Commission’s HQ.
Earlier this summer, the Danish government nominated Dan Jørgensen as a candidate to become EU commissioner for the next five years. Vestager’s Social Liberal party — which had put her forward as Copenhagen’s nominee for EU Commissioner in 2014 — is no longer part of Denmark’s governing coalition.
Ten years at the helm of EU competition policy
Competition law — also called antitrust, if you are reading this from the other side of the pond — had a central role in the construction of the EU. The founding quid pro quo was that France could subsidise its farmers if it accepted Germany’s insistence to protect the internal market from anticompetitive practices and subsidy wars. Such provisions were cast in stone in the EU’s founding Treaty in 1957.
In the EU’s institutional puzzle, commissioners represent the general interest of the EU, not the country that nominated them or the party to which they belong. “Since the values of equal treatment are so fundamental, when I work on a state aid case, I cannot have one approach to a prime minister or a minister of finance who has my party affiliation, and another to someone who has a different one. That would be wrong. Simply wrong”, Vestager notes.
The Commission is the guardian of treaties that set free competition in the common market as a quasi-constitutional goal, some would say a religious one. Vestager recalls the oath she took before the Court of Justice of the EU:
“The politics of it all is to make the Treaty come to life. That is the oath that you take, and I took that oath very seriously. We were bussed to Luxembourg, standing in front of 37 judges in their full gear, looking at you. You are taking the oath that the Treaties will guide you. An oath that you will take no instruction and seek no instruction from anyone. There were so many political choices made when that Treaty was written: it is not just a technocratic room without politics.”
The competition portfolio is very technical. Competition law is a field populated by career lawyers and economists, who speak their own jargon and laugh at wonkish jokes. “I knew very little about competition law when I joined”, Vestager says. “My economic training was mainly in macroeconomics. I had studied microeconomics and industrial economics, of course, so I knew about it. But I think the chief economist and his team must have been like ‘no, she cannot work with us’. I tried to keep my learning curve very, very sharp.”
Yet the competition portfolio is also a very political one, engaging directly with the world’s biggest companies and the governments of the 27 EU Member States. After she landed the job in 2014, Vestager quickly gained a reputation as a tough enforcer. She imposed multi billion euro fines on Big Tech companies, fought back against sweetheart tax deals granted by EU governments to certain companies, and acted as a state aid vigilante when governments tried to prop up their own domestic champions at the expense of their neighbours.
Sweeping legislation such as the Digital Markets Act (DMA) or the Foreign Subsidies Regulation (FSR) had a profound impact on competition enforcement. The Commission’s lawmaking set the tone of the global conversation, an example of the so-called “Brussels effect”. Vestager’s tough enforcement won her plaudits, but also quite a few foes. The French and German governments snapped at her when she blocked the Alstom/Siemens deal; Apple CEO Tim Cook dismissed the Commission’s €13 billion tax case as “political crap”; and Donald Trump called her “Europe’s tax lady”.
The Commission has often been accused by Washington of using competition rules to protect European companies. The transatlantic relationship has improved under Joe Biden, who issued an executive order on promoting competition in the American economy and appointed Lina Khan, a long-time critic of Amazon, as chair of the Federal Trade Commission. Regulatory convergence or divergence in competition policy matters. It can be very tricky for businesses to navigate antitrust proceedings in different jurisdictions, let alone deal with the consequences of potentially divergent conclusions or remedies.
“We obviously do not have global competition law. And we have different legislation in different jurisdictions”, Vestager notes. “That being said, I think cooperation with the US has never been better. We have, as a sibling to the Trade and Technology Council (TTC), the Joint Technology Competition Policy Dialogue, which takes place once a year with the FTC and the DOJ, where we discuss policy. I think we have developed quite a similar approach to what kind of competition issues arise with the dynamics of digital markets.
We work very closely with the US on merger cases and antitrust cases. For the business community, this is a huge benefit. If we have a theory of harm that can be solved with just one same remedy instead of having divergent points of view — which means businesses have to do much more — this is positive.”
Vestager also faced pressure from some European governments to steer the competition rulebook in other directions.
In 2019, France and Germany threw their political weight behind a call to revise the way antitrust enforcers assess relevant geographical markets, following the prohibition of the Alstom/Siemens merger by the Commission. They thought the Commission was blind to the threat posed by potential competitors from China, a country that does not play by the free market rulebook. In 2024, Paris and Berlin asked the Commission to allow for consolidation in strategic sectors such as telecommunications or aerospace.
When Covid-19 struck, state aid rules were made more flexible by the Commission to allow governments to pour billions into their fledgling economies. The temporary framework was further extended following Russia’s invasion of Ukraine and the energy crisis. Vestager maintained that state aid rules should not be a collateral damage of the multiple crises weathered since 2020.
Setting more flexible state aid rules came with a huge risk of fragmenting the internal market: Germany alone accounted for 76% of state aid granted to companies in 2022. The recently published Draghi report agrees that uncoordinated national policies have an “adverse impact on the Single Market when the largest countries with the most fiscal space can provide much more generous support than others”.
So we ask, should competition policy pursue goals other than consumer welfare and contestable markets? An economist by training, Vestager goes back to the canonical Tinbergen rule — one policy instrument per policy goal. She says:
“Instead of overburdening competition tools by making them look at all these different issues, what we need is to have different tools for different purposes. This is also one of the first things you learn when you train as an economist, and I think it has absolutely proven its worth. Two birds with one stone: have you ever seen that work in practice?”
She adds: “While we have competition tools dedicated to competition issues, there are issues that may require other considerations — economic security or media plurality, for instance. Unfortunately, France does not have a call in provision for media plurality and I think every country should have that. The UK uses the following argument very actively: ‘this merger may go ahead for competition reasons, but we need to look at it also for media plurality reasons’. When it comes to economic security, we have FDI screening.”
To some critics, competition policy is dictated by unaccountable civil servants in their ivory (Madou) tower.
This is not true, argues Vestager, who insists that the Commission takes great care to involve many stakeholders. “Every time, when we have had a piece of legislation, we have been doing our best to make sure that the Parliament also has a say. For instance, when we made the proposal — which is now law — on how to increase the resources, the independence, and the toolbox of national competition agencies, we found a double legal basis that also enabled the Parliament to have a say. I think this is very important.”
When it adopts guidelines which lay down the enforcers own reading of applicable competition rules, the Commission aims to be transparent, Vestager notes. “For instance, the new guidelines that we are developing on Article 102 are based on 34 judgments. Of course, you need to make an interpretation because so many judgments create a room for interpretation, but not a systematic line for how you should decide. But it creates the transparency to say, ‘well, we read these judgments in this way, these are the guidelines that we will be using’. We also have consultations and workshops for the people for whom it's necessary to have a say.”
Reflecting on a decade at the helm of EU competition policy, Vestager summarises:
“Competition law and policy have changed a lot in the past decade. For instance, it is now much more common to have innovation theories of harm; we also have redone so much of the state aid rulebook — just to mention a few things. Competition law and how we interpret it will continue to develop. I think we will see even more novel theories of harm, including in cases that may seem like standard cases at first sight but in which innovation, for example, could now turn out to be the main issue.”
Coming full circle
As she nears the end of her second five year term, Margrethe Vestager expected the pace of work to slow down a bit. “I thought the end of the mandate would be in the vein of ‘let’s go see that exhibition in Paris’”, she quips. “But no, it is very intense.”
The EU’s top court handed down three groundbreaking judgments shortly after the summer break, when Brussels is typically a ghost town. These judgments were years in the making, and will have a lasting impact on competition policy.
In the Apple judgment, the Court confirmed the Commission’s decision that Apple had received unlawful tax benefits from Ireland between 1991 and 2007. The judgment is final, meaning Apple will have to pay back €13 billion in taxes. The win came as a surprise, as the Commission had previously lost similar cases against Luxembourg with Amazon and Fiat, and the Netherlands with Starbucks. Using state aid rules to fight against sweetheart tax deals was a bold move against large companies’ profit allocation strategies. As negotiations on tax harmonisation have long stalled due to the requirement for unanimous decision-making at the Council of the EU, the Commission turned to the state aid toolbox.
In the Google judgment, the Court confirmed the €2.4 billion fine imposed on Google by the Commission in 2017. Google abused its dominant position in the online search market by favouring its own comparison shopping service, Google Shopping, over competitors.
For Vestager, these two judgments are a full circle moment. “The recent judgments on Apple and Google confirm what we have been doing, and they validate these very basic principles with which we have been working, including tax fairness, and that no one is above the law”, she says.
“People ask me quite often: ‘do you think that we can make Big Tech abide by our legislation?’. And that is a very thoughtful question because it means that people are afraid that, somehow, Big Techs just do not care. And I think the latest judgments show we can do it, we can win our cases.”
In Illumina/GRAIL, the Court struck down the Commission’s policy of accepting referrals of transactions that were not notifiable under national merger control regimes. Essentially, the Commission had grown frustrated by its inability to scrutinise ‘killer acquisitions’, when large companies acquire very young and promising start-ups with low turnovers. These transactions often fall below the thresholds that trigger a merger control review, but can have significant anticompetitive effects.
In 2021, the Commission adopted a guidance paper that interpreted EU merger control so as to encourage national competition authorities (e.g., the French Autorité de la Concurrence or the German Bundeskartellamt) to refer transactions to the Commission even when they did not trigger a notification.
Following this interpretation, the Commission accepted the referral by the French competition authority of Illumina’s $8 billion acquisition of US-based GRAIL, which had no revenues in the EU. The Commission prohibited the deal, but Illumina went forward and was fined a whopping €432 million for illegally taking control of GRAIL. In its judgment, the Court struck down the Commission's decision to examine the merger, which automatically invalidated all subsequent decisions.
“You must be vigilant in competition law enforcement, but you also need to push it forward”, Vestager reflects.
“The next commissioner will have very important questions to answer about how to catch what we call ‘killer acquisitions’. Because it is not a given that you catch them with a lower turnover threshold, or a threshold based on the deal value. The risk is that you have a net which is way too finely knitted, and which creates an enormous burden on businesses and an amount of work that does not make any sense. That is an important consideration. And you need to think about it, but not too long. Because as we speak, these things happen. The good thing is that we examined 100 merger projects, and we only investigated three.”
A new chapter for EU competition policy
Margrethe Vestager is currently the longest serving Commissioner for Competition. Until earlier this year, the record was held by Hans von der Groeben of West Germany, the very first Commissioner for Competition, who served from 1958 to 1967.
Once formally appointed by Ursula von der Leyen, Vestager’s successor will have to go through parliamentary hearings at the European Parliament. Vestager remembers preparing for this hearing as “a very rewarding process”. “It was really intense. You go meet the European Parliament coordinators, the head of the committees, you try to figure out what their interests are, what they will ask you about, so that you have some guidance.”
We ask her whether she has any advice to give her successor.
“I think if there was something I wish I had known and that would have made it easier when I started here, it would have been to hear, ‘listen to the teams, the hierarchy: they are the clever people who know everything about competition law, and you don't have in any way to compete with them at being a better lawyer because this is not your role. Your role is to have the political responsibility and to give the steer as to what we do or what we do not do, the options we take, those we have not looked at. That is not a legal assessment. That is navigating and giving a steer on what a legal assessment is.’ This means that you can have my role without being a competition lawyer.”
Goodbye, Brussels!
Before Vestager arrived in Brussels, she had spent all of her career working in Danish. Her role at the Commission was the first job where English was the primary language. She recalls: “One day, I was meeting with Jonathan Hill, [then Commissioner for Financial Stability], and this was when I was struggling with English. And I asked him, ‘aren't you devastated to hear how we treat your language?’ He replied: ‘no, I'm so honoured that you're all trying.’”
Margrethe Vestager has not publicly revealed what she will do next. She will likely be returning to Denmark, at least for some time. Brussels is a city she will miss, she tells us. On weekends, Vestager could be spotted frequenting thrift shops, blending in with the locals. When we ask her what she likes and dislikes about the capital of the EU, she gives a heartfelt answer.
“You need to give [Brussels] a chance. Because at first sight you might think, ‘Why do they have garbage in the streets? Why can’t I find my way around?’ — it is a difficult city to map out. But then, when it gets under your skin, it’s wonderful — the markets, the restaurants, the mixed neighbourhoods. I live in Ixelles and every kind of person lives there. It is also actually quite a green city, with many parks. And I love that ‘rhythm’ of the houses — these small, slim houses with the ironworks that are all different. It is like music in the street, like notes that go up and down. And the minute you realise it, you see that it's everywhere. In some neighbourhoods it's quite a modest tune, in other neighbourhoods, it is really elaborate. But it is the same kind of music all over the city. And I really like that. I am going to miss it a lot.”
Brussels’ diverse food scene is also something Vestager enjoys. “Do you want Tanzanian food? Well, this is where you go. Do you want Italian? Japanese fusion? Well, that is where you go”, she says. “Of course, it all circles around the French fries, which are a gem.”
Vestager still has some time to enjoy Brussels’ delicacies (Frit Flagey or Maison Antoine, we let you decide which is best) before going back to Danish stegt flæsk (fried pork belly served with potatoes and parsley sauce) and smørrebrød (pickled herring).
Farvel, Margrethe!