Danish reformer gets EU antitrust stick; German to police the Internet

Reuters News
Posted: Sep 10, 2014 9:34 AM

By Foo Yun Chee and Julia Fioretti

BRUSSELS (Reuters) - Europe's incoming competition and telecoms chiefs will have their plates full for the next five years as one tackles global companies suspected of acting unfairly while the other seeks to keep the Internet open and let online services flow freely.

Denmark's Margrethe Vestager, a former economy minister who steered her country through austere reforms in recent years, takes on a post with the power to veto state aid granted unfairly to companies and to block multi-billion euro mergers.

Her power lies in her ability to levy fines of as much as 10 percent of global revenues on companies found guilty of anti-competitive behavior, as shown by in the billion-euro sanctions against Microsoft and Intel by her predecessors.

A career politician who started off as a stagiaire" (intern) in the European Parliament, 46-year-old Vestager has been considered by Danish media and pollsters as the most powerful person in government, even above Prime Minister Helle Thorning-Schmidt.

Having forced through deep cuts in unemployment benefits, a jewel in Denmark's generous social welfare crown, she stands out as almost dogmatic in a country where politics are marked by consensus and compromises.

Vestager will have to take on powerful companies such as U.S. internet giant Google, Russia's Gazprom and a clutch of banks suspected of rigging the foreign exchange markets. Her biggest case could be an ongoing probe into charges that Google may be squeezing out rivals in Internet search results which she may have to take on if outgoing commissioner Joaquin Almunia fails to resolve the case before he leaves next month. She will also have to decide if Ireland, Luxembourg and the Netherlands provide an unfair advantage to companies such as Apple, Starbucks and Fiat with tax rulings which help them cut their tax bills.


German conservative and current EU energy czar Guenther Oettinger takes on a job of vital importance to Germany. Despite her efforts in the last five years, current telecoms chief Neelie Kroes has not been able to create a bloc-wide telecoms market.

Telecoms operators such as Deutsche Telekom say this is necessary to spur investment in fast speed Internet, encourage e-commerce and create jobs.

Oettinger will have to tackle the net neutrality issue which pits the telecoms industry against U.S. tech giants over the right to prioritize some Internet traffic over others. Critics fear companies with deep pockets may benefit.

Privacy is another hot issue. Oettinger, who has to face down Gazprom in his current role, will need to strike a balance between privacy and the free flow of information. Some see it as a battle between U.S. companies such as Google and Facebook and Europe.

These new appointments are part of incoming European Commission President Jean-Claude Juncker's team for the next five years.

Analysts said the two new faces could be more sympathetic towards Europe's former telecoms monopolies who have criticized Almunia for his tough line towards mergers in the sector though all were cleared with relatively soft concessions.

"Oettinger seems a strong pro-incumbent appointment, in our view, due to his party affiliation (the German CDU has been quite supportive of Deutsche Telekom positions in recent years, and we believe (German chancellor) Angela Merkel is supportive of Juncker's overall digital agenda)," JPMorgan analysts wrote in a note to clients.

"Denmark seems a fairly pro-competitive market to us, and this also characterizes the telecoms market."

Telecoms lobbying group ETNO said the new policymakers should take a broader view of issues under their charge.

"We believe it is time for a new approach: more growth-enhancing policies and less traditional regulation to benefit both European citizens and businesses," ETNO head Luigi Gambardella said.

The creation of a single telecoms market is seen as key for increasing the competitiveness of European telecoms operators - hit by years of falling revenues - with their U.S. counterparts.

(Additional reporting by Sabina Zawadzki Editing by Jeremy Gaunt and Jane Merriman)