The EU’s competition chief explains why punishing Big Tech is good for innovation

Laying down the law.
Laying down the law.
Image: Web Summit
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Lisbon, Portugal

Margrethe Vestager, the European commissioner for competition, took the stage of Europe’s biggest tech conference this morning (Nov. 7), shod in green Nikes, to explain to tens of thousands of startup founders why she was taking on the world’s most powerful technology companies. She has levied record-breaking fines and tax repayment orders on Google and Apple in the last 12 months.

In a speech titled, “Clearing the path for innovation,” Vestager made the case for European competition law, arguing that, ultimately, startup founders stand to lose from monopoly abuses by tech giants. “Competition-law enforcement can help to show that no company is above the law,” she said. “No company has the right to close down competition to disable the innovation of each and every one of you.”

Vestager used her childhood years in the Danish countryside as a metaphor for a fair competitive landscape. “Where I grew up, the countryside was completely flat, there were no hills to be climbed,” she said. “But what you got in return was an amazing horizon, the biggest sky imaginable…It showed me and the people I lived with that you can dream. That you can make a difference.”

Citing Google as an example, she said, the world’s tech giants are hampering entrepreneurial dreams by abusing their dominant positions. “What if the thing that was holding back innovation wasn’t our own determination, but the actions of powerful companies? Well, then we would certainly need competition rules. Because competition makes innovation work,” Vestager said.

After the speech, Vestager told reporters her department is looking into Apple’s new tax arrangements in the UK crown dependency of Jersey, which were publicly disclosed as part of the Paradise Papers leak. “We have taken an interest in getting to know how Apple is organized now,” she said. She said that the commission had been in touch with Apple for some time over its new arrangements.

The role of artificial intelligence and algorithms also needed to be debated publicly, Vestager said. She said she wanted to spark a discussion about “compliance by design” for algorithms to avoid a situation where “what happens in the black box remains in the black box.” She said: “Whatever the algorithm, there is still a person or business responsible for it.”