Vestager needs to blaze a new trail in public communication

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

Margrethe Vestager at the Parliament hearing [European Parliament / Flickr]

Margrethe Vestager [European Parliament / Flickr]

As the new Competition Commissioner settles into the role, she should take the opportunity of her arrival to clarify how the EU executive communicates on competition cases, write Alec Burnside and Anne MacGregor, since the issue has landed her predecessor in hot water.

Burnside and MacGregor are partner and special counsel respectively at the Brussels office of law firm Cadwalader, Wickersham &Taft LLP.

This week, as the five-year changing of the guard takes place in the Berlaymont in Brussels, Europe exchanges a male, socialist Competition Commissioner from a large southern member state (Joaquin Almunia), for a female radical left/social liberal from a small northern member state (Margrethe Vestager). Which invites the question asked every five years: will anything change?

After all, so the argument goes, DG Competition is applying the law, and Commission decisions are subject to review by the EU courts in Luxembourg. So any Commissioner has to keep to a straight and narrow path. But the reality, we know, is that the Commission is a political institution, and individual Competition Commissioners have all been politicians by background (even if Mario Monti did it in the reverse order). The Commissioner directs staff, week-in, week-out, on the conduct of cases. He/she decides on the cases to pursue and those to clear. Often the decision is the Commissioner’s alone, in the Commission’s name but under powers of habilitation. And even draft decisions brought to the full College of Commissioners for approval are on the Competition Commissioner’s initiative, adopted in 99% of cases without debate.

Successive Commissioners have brought to the role the politician’s taste for the headline, and the need for the Commissioner to advocate publicly the EU’s work in this area is obvious and undeniable. But it is – or ought to be – quite different in relation to the investigation of individual cases. The Commissioner is a decision-taker, with duties of impartiality and fairness. Lawyers describe such a role as “quasi-judicial”.  And the decisions are not trivial: billions in cartel fines, prohibition of mergers, state aid for bank bail-outs, and the punishment of abusive monopolists. The media have an appetite for comment on pending investigations, and the competition portfolio provides extensive scope for public profile.

Competition Commissioners have always fed this appetite, but Mr Almunia has been more outspoken than most. A bevy of journalists hang on his every word, for news of the cause célèbre of the day – Apple, Deutsche Boerse, Gazprom, Google, Hinkley Point, Libor, Telefonica, UPS – reporting speeches and comments made in Athens, Barcelona, Berlin, Bilbao, Bologna, Bruges, Cernobbio, Davos, Dublin, Florence, London, Madrid, Monaco, Murcia, Paris, St Gallen, Tenerife, Vilnius, Warsaw – and Boston, Cape Town, Marrakech, Melbourne, New York, New Delhi, Washington and Sydney (in just 2013/14).  Important developments have been put into the public domain via TV and radio interviews, and indeed personal off-the-record briefings. The present two-term Spanish Commissioner leaves Brussels under the cloud of two complaints to the European Ombudsman alleging that his public comments concerning open antitrust investigations have infringed due process and interfered with rights of the defence.

Mr Almunia is by no means the first competition chief to land himself in such hot water: Karel Van Miert was similarly outspoken. In 1997, after receiving two complaints against Formula One’s governing body, the Fédération Internationale de l’Automobile (FIA),  competition officials sent a preliminary “warning letter”. No sooner had it been despatched than a spokesperson gave copies to journalists, and it was widely quoted. Adding fuel to the fire, the Commissioner then gave a number of interviews: in the Wall Street Journal Europe Van Miert called the exclusive broadcasting arrangements for Formula One events “completely unacceptable”, and stated that the FIA was guilty of the “single worst case of anti-trust violation” he had ever seen. And yet DG Comp’s procedure in that case was only at an early stage.

The FIA asked the Commission for a public apology, to no avail, and then sued in Luxembourg, alleging that the Commission’s actions had caused loss of revenue to the FIA and tarnished its reputation. Ultimately the Commission issued a press release in 1999 with a written apology as follows:

“The Commission regrets that statements were made which have been understood as prejudging issues relating to the FIA, and confirms that no final decision of any kind has been adopted in this case, which is still being considered. Any future statement will make it clear that no decision has been taken, as long as this remains the case. The Commission also regrets that copies of a letter from its Directorate-General for Competition (DG IV) to the FIA of 19 December 1997 were distributed to some journalists, and will see to it that this does not happen in the future.”

The lessons, if they were learned at the time, seem to have been progressively forgotten. Unlike some other antitrust agencies, the Commission presently has no guidelines in place as to what is right and proper when it comes to messaging emanating from the institution on all things competition and antitrust. This is a deficit which needs to be remedied. No comment on pending investigations seems to serve other agencies well.

The challenge for the Commission is, moreover, not limited to the Commissioner’s public appearances. Journalists familiar with the Commission’s procedures know well enough that prime time for leaks is the moment when DG Comp releases papers for inter-service consultation, or indeed inter-cabinet coordination ahead of the College. On occasion the usual Monday meeting of Chefs de cabinet is not briefed on antitrust proposals to come to the College on the Wednesday, being convened instead specially early on the Wednesday, just minutes before the full College meeting starts, in order to try to prevent leakage of sensitive information.

At a time when the Commission is active internationally, selling the importance of due process to newer antitrust agencies, it should pause to look in the mirror. Starting with a blank sheet of paper today, no-one would advocate giving antitrust enforcement responsibilities to a political institution such as the Commission. The old debate on stripping DG Comp out of the Commission, and creating and independent agency, is still relevant. The counter-argument is familiar, that competition enforcement has its place in the Commission’s toolkit, giving it vital leverage – the progress on unfair tax competition, using state aid disciplines, is a prime example. But with power comes responsibility. The Commission’s own rulebook lacks guidelines on public comment, and the institution as a whole has difficulty maintaining confidentiality once information goes beyond DG Competition. A clear distinction is needed between transparency on policy, which is essential, and the proper process in individual cases, where a reset on media policy is long overdue.

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