Data is currency for the biggest tech companies in the world. Apple, Facebook, Google, and other giants have predicated extremely successful business models around harvesting and leveraging data from their users. But recent scandals involving misuse of data have caught the public’s attention, leading to questions about how user information is collected and what it’s being used for. While this interest on a mass scale is relatively new in the United States, it has long been front-of-mind for Margrethe Vestager. As Europe’s competition commissioner, it is her job to enforce regulations on large corporations—and Silicon Valley’s giants are in her crosshairs.
Who is Margrethe Vestager?
Vestager may not be a mainstream figure in the United States, but the 50-year-old Dane is popular enough in Europe to be the basis for a character on a hit Danish television show. An economist by training, she began her political career at 21, joining the Danish Social Liberal Party. She was elected to Parliament in 2001, and after a stint as national chairwoman, became her party’s parliamentary leader in 2008. The party lost half their seats in the next election, leaving Vestager to weather a storm of criticism. 2011’s elections saw the Social Liberals recover, with Vestager promoted to economics and interior minister, but she deeply polarized some segments of Denmark after overseeing cuts to retirement and unemployment benefits. Despite these setbacks, she was appointed to the European commission in 2014.
Vestager has spent the past four years in her post with eyes fixed on the heavy hitters of American tech, leaving her equally reviled and revered by different circles. 15,000 young tech workers who attended an interview with Vestager at a recent conference sat transfixed by her every word, saving an especially positive response for her declaration that “we need to take our democracy back” from social media. Understandably, moments like these are not favorites among tech leaders in her purview (not to mention more conservative, free market-oriented American politicians).
Vestager draws the most name recognition from younger generations, where she is celebrated for her willingness to take on tech’s biggest companies. Corina Stoenescu, a Harvard Business School student who helped organize an event featuring Vestager as the keynote speaker, told the New York Times that “[Vestager] is what my generation looks for in a politician…she’s the only person on the planet who has a voice about [regulatory action towards tech giants].”
The competition commissioner’s primary role is to ensure compliance with competition laws, and Vestager has taken to the role with gusto. The biggest companies in Silicon Valley have drawn the most scrutiny—and the biggest fines—from her office. In 2016, she ordered the Irish government to reclaim roughly $15.5 billion in back taxes from Apple after determining they had received an illegal, exclusive tax break (a decision that has since been appealed). Facebook was on the receiving end of a $131 million penalty in May 2017 after an investigation concluded they had misled European lawmakers during their purchase of WhatsApp. Qualcomm, the prominent chip maker who was recently placed under a regulatory microscope in the US for their proposed merger with Singapore-based behemoth Broadcom, was hit with a $1.2 billion fine for perceived abuse of their size at the expense of competitors. June 2017 saw Google receive a $2.8 billion fine—the largest in the European Commission’s history, and over two times as much as the largest penalty doled out in America—after the European Commission determined it had used its search engine to gain an unfair advantage over rival services.
But Vestager’s recent focal points are less about market dominance and more about data privacy and the way tech firms profit from their users’ information. “What’s fascinating about her role is that in her mind, the new antitrust is about data, not about market power,” said Randy Komisar, a veteran Silicon Valley executive-turned-venture capital firm partner, who believes that the laissez-faire American economic approach is flawed. “I think what we’re seeing [in the United States] is a perversion of free market economics that is very difficult to counter without regulation,” explained Komisar.
The World is Watching
The latest case to draw the commission’s attention is Apple’s proposed acquisition of Shazam, the popular music-identification app. It’s a small transaction by Apple’s standards, but the deal’s implications for data – “how it works as an asset, how it influences the marketplace” when combined – have piqued Vestager’s interest. It’s a case that will do little to improve her perception among her critics, some of whom believe her to be biased against American companies. Regardless, the precedent she is setting extends well beyond Europe. Brazil recently began litigating an antitrust case against Google, and the state of Missouri is also investigating potential antitrust violations by the company. Vestager may not be making friends in the board rooms of America’s tech elite, but her rulings carry weight as they position the European Union as the regulatory model for the rest of the world.