Vestager distances Commission from option of ‘Big Tech Breakups’

The EU has the power to execute a potential breakup of global Big Tech giants, but it is not currently the "right thing to do," the EU's Vice-President for Digital Affairs, Margrethe Vestager has said. Vestager's position puts her at odds with Internal Market Commissioner Thierry Breton, with reports surfacing that the Frenchman would like to keep the option of 'structural separations'  of the Big Tech giants on the table.

EU Commission vice-president Margrethe Vestager and EU Commissioner Thierry Breton attend a news conference in Brussels, Belgium September 18, 2020.

The EU has the power to execute a potential breakup of global Big Tech giants, but it is not currently the “right thing to do,” the European Commission’s Vice-President for Digital Affairs, Margrethe Vestager, has said.

Vestager’s position puts her at odds with Internal Market Commissioner Thierry Breton, who has recently been quoted as saying he would like to keep the option of ‘structural separations’  of the Big Tech giants on the table, under certain conditions.

“When it comes to breaking up of companies, I think this would indeed be doable in Europe – if we had a case that would take that as a remedy,” Vestager said in response to a question from German leftist MEP Martin Schirdewan.

“But so far, we have not had competition cases that would lead us to think that this is the only remedy that would be the right thing to do in this situation.”

Article 102 breakup powers

The Commission has powers, as defined in Article 102 of the Treaty, to impose a series of remedial measures against firms that have abused their dominant market position, including the mandating of a breakup of a business.

However, Vestager has in the past mostly opted for imposing heavy fines or demanding a change in business practices for certain firms that have breached EU antitrust rules.

The EU executive does not regard the competition powers as defined in Article 102 as sufficient in addressing some of the problems of the platform economy, due to lengthy review processes and the nature of intervening in potential infringements only on an ex-post basis.

In this vein, with the planned introduction of a Digital Markets Act on 2 December, the Commission plans to unveil a list of ex-ante prohibited practices by digital gatekeepers, as well as a market investigation tool that could be used to examine how certain markets are prone to failure.

Vestager-Breton difference in opinion

In a recent interview with the Financial Times, Breton said that under certain conditions, the Commission could consider imposing ‘structural separation’ against Big Tech giants.

An EU source familiar with the matter said during the ongoing drafting of the bloc’s new competition rules that there is greater evidence of the differences in approach between Breton and Vestager in terms of their attitude on breaking up Big Tech.

The source explained that Breton’s cabinet had been putting Vestager’s under pressure to better consider the option of breaking up some of the digital giants. However, EURACTIV followed up with the Vice-President’s cabinet, who denied this.

More broadly, a position paper recently published by France and the Netherlands shone some light on their attitude to potentially decoupling Big Tech’s digital assets. A statement from French junior minister Cédric O and his Dutch counterpart Mona Keijzer noted how the option of enforcing breakups should be taken into account earnestly by EU antitrust enforcers.

“Our common ambition is to design a framework … to address the economic footprint of such actors on the European economy and to be able to ‘break them open’,” Cédric O said.

[Edited by Zoran Radosavljevic]

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