Feb 03, 2025
In an exclusive interview with The Capitol Forum’s Javier Espinoza, former EU antitrust chief Margrethe Vestager addressed concerns about a potential shift in U.S.-EU relations with President Donald Trump. The full transcript, which has been modified slightly for accuracy, can be found below.
JAVIER ESPINOZA: Woo! Yes. Excellent. Okay, so it’s a pleasure to see you.
MARGRETHE VESTAGER: It’s very nice to see you.
JAVIER ESPINOZA: We meet on a rare sunny day in Denmark. In Copenhagen, before we started recording, we were talking about transitions. And I’m very keen, and many people in Brussels are also keen, to learn about your recent transition and transformation.
MARGRETHE VESTAGER: Well, when people ask me, so what are you going to do? I said, I’m going to move. I’m going to sleep. I’m going to think. And I haven’t even gotten to the sleep part of that, because it has been quite busy. But I think transitioning is interesting, because it allows you to see how people actually see you. Because most people, of course, they see your title. They see your role. They see your position. And so far, so good.
JAVIER ESPINOZA: As we were saying, you were wearing the cape of the European Union, the flag, for a decade.
MARGRETHE VESTAGER: When I remember coming in as Commissioner for Competition ten years ago, here in Denmark, they were like, what? And I’m not a competition lawyer. I’m not even a lawyer. I’m an economist by training, and my working life is as a politician.
So, it was really important for me to get the cape. Because then people see the cape, and they say, okay. The person wearing the cape is a Commissioner for Competition. And I think then what happened over the year is that I got to wear the cape. It wasn’t just the cape representing a role or a position. It was also me wearing the cape. Now I have handed it over to someone else.
So, it’s interesting to see, what do I still have? What part of the leadership, the achievement, the thought work, the network, is still here with me? And I think that’s the exploration of transition, to see who are you when you leave the cape behind? And I think, for me, I’m a better person if I had been wearing the cape myself. And it wasn’t just the cape representing a position or a role.
JAVIER ESPINOZA: I wonder, as I was coming here, you left a position of immense power. Everyone that wants to see you every day, your calendar, it’s exploding. For every meeting that you book in the diary, I’m sure there’s, I don’t know, ten people that couldn’t get in that time slot. How do you go from — and you’re traveling everywhere, Singapore, the U.S., San Francisco. And then, in this transition, I’m just inferring, guessing, it’s not as demanding of your time. How do you adjust?
MARGRETHE VESTAGER: Well, first and foremost, obviously, you’re not very efficient. Because for every half hour meeting in my calendar, other people had poured in time. Time for practicalities, how to get people into the building, how for me to travel, what hotel to be in, who to drive a car. And people have been pouring in all their knowledge, all their experience, in the briefings for me, prep calls with the meeting participants. So, I don’t know, but maybe a half an hour meeting would be a ten hour investment.
JAVIER ESPINOZA: Interesting that you were aware of it when it was happening.
MARGRETHE VESTAGER: Oh yes, very much so, very much so. And, of course, I have some help, but not a lot. So, of course, I have to do all of that investment myself.
And then you have to reorganize your day. To be able to read, to write, to talk with people. Because I’m not a person, if you lock me up in a room and say you can only come out when you have a bright idea, you’d never see me again. I like to talk with people. I like to develop ideas when I talk with people. So, all of that, of course, you do with yourself.
So, I have to figure out, well, with whom will I do that? And I think the biggest trap when you transition out of a very intense job is that you do too much. You say yes to too much. So far, I just say, unfortunately, I do not say yes now. So, it’s not that I want to say no to everybody. It’s just that I do not say yes.
Because we are here today at Denmark’s Technical University, where I’ve started chairing the board, and I’m also not an engineer. I’m still an economist, having worked as a politician and Competition Commissioner.
So, now I’m exploring. And it’s just, it’s amazing. You know, if you have something that you want to ship to Mars, it’s highly likely that you will have an instrument that they have made here onboard. So, if you want to know the latest in fusion energy, well, you go talk to people here and they will show you the plasma that they make in order to make sure that we’ll get there eventually. And so, on and so forth.
JAVIER ESPINOZA: It’s opening your mind in different avenues.
MARGRETHE VESTAGER: So, it’s opening my mind in different avenues. And, of course, it’s not a full-time position. It’s a board position. It’s the strategic leadership of the place. But you need to embrace it. You need to get to know people. Because otherwise, how can you be relevant?
So, one of my first decisions was to say, I have accepted this position. I want to invest myself in doing this.
And the second thing is that the Blavatnik School of Governance in Oxford, they have what they call a World Leader Fellowship. So, I’ll invest some time over there as well, engaging with the students, with the researchers, and with the staff. And one of the things that I’m trying to push is to figure out how actually to make things happen. You know, so much beautiful legislation is passed, but people don’t feel the change. So, when to think about it?
And the second point, which is actually related to it, that takes my interest, is that we all want to share best practices. But I have the suspicion that nobody wants to hear how other people succeed. They want to hear how other people overcame failure.
JAVIER ESPINOZA: So, that they themselves can succeed, I guess.
MARGRETHE VESTAGER: Yes, so that you realize what are the warning signs that I’m about to fail? So that I can take a different direction. And it was the same back in the days when I was doing the Danish budget with Bjarne Koit, and so the Minister of Finance and me, the Minister of Economics. The paradox is that you get much better guidance from the pain when you have to cut than you get from the happiness of spending. Because when you spend, it’s never enough. Never ever. But when you have to cut, you realize, oh my God, that hurt. Some people are going to be really not only angry about this, but also sad about this.
So, I think there is power, there is insight in exploring failure and how to overcome it. And I think we can make better guides for ourselves if we know how that looks, rather than just saying, oh my God, that’s amazing. But that doesn’t really teach you anything. So, that. And then I’m going to do some talks. So, I’m heading off to New York tomorrow, actually.
JAVIER ESPINOZA: Interesting.
MARGRETHE VESTAGER: Yes.
JAVIER ESPINOZA: I think you said something really interesting about these laws and people feeling the change. What’s your assessment and your reflection now, looking back over the decade, of all the things that you were doing? Because I’m sure you were thinking not just about a narrowly defined piece of legislation or an action on a merger or a movement on state aid. They were, I’m sure, part of a weaving of a fabric to a type of society that you want to see in Europe.
MARGRETHE VESTAGER: Exactly. Because every step we take should be part of creating a society where everybody has a fair chance of making it.
JAVIER ESPINOZA: And has that been achieved after your time there?
MARGRETHE VESTAGER: Obviously, not fully. I think a lot of people, they still fear that they don’t really have a chance of making it. And sometimes I’m also worrying. Because if we do not make good of, for instance, our new legislation on artificial intelligence and opening the market when it comes to technology, the risk is that the majority of us will just be meat for the machine. And value will just be for the very few.
But the thing is that whenever we take a step to make sure that we’re not sliding backwards, we’re already have a success. Because then people see, okay, it is actually possible. And I think some of the wins — we had the two ones very late in the mandate, on the Google case and the Apple tech case — I think that’s the kind of thing that catches people’s imagination. To say, actually, they are the most valuable companies on the planet and they are not above the law. And that, I think, is when with other legislation you can pave the way, but with that kind of win, you can capture the imagination. So, that people will use the ways that have been paved.
JAVIER ESPINOZA: You spent years, I don’t know if internalizing, you will tell me, but hearing everywhere that you were going to lose Apple. That the Apple stated case, a landmark case, was going to be a loss. As I understand it, almost seconds, minutes, before even the decision came out. I’m interested to hear from you, what was that moment like? And how did you feel to learn something in a split second that changed the legacy that you left?
MARGRETHE VESTAGER: Well, I never gave up hope. Because I found that it was a strong case, it was an obvious case. And it could not be that what we had discovered was legal. And then everybody told me, no, no, no, no, no. We’re going to lose that. We’re going to lose that. And I said, yeah, but listen, now the general advocate actually sides with us. Yeah, but we’re going to lose it anyway.
So, of course, I had to prepare mentally for losing it. And it would have been a completely different end of mandate had we lost it. Because it would have tainted everything that we had done. Not only on the tax work, but everything that we had done. So, you sort of brace for impact.
And I had insisted to go to the press room. Because I was in the press room when we launched the case. If we were going to lose the case, I wanted to be in the press room anyway. Because there were things to be said about it. Are you really sure you want to get to the press room? It will not be a nice press room. Yeah, it’s not nice losing. But if you want to own your victories, you need to own your losses as well.
So, we were preparing for the press room. And we always prepare very, very carefully. Because the speaking of the press room is also what goes online, what is there for — you can search anything I’ve said in a press room. And there you’d find both the decisions themselves, the context, and what it means in a larger perspective.
So, it’s always, there’s a draft, I’d read it out loud, we’d go through it. I usually say, I thought your bag of punctuation, is that empty? I’ll give you more. Because there’s such a difference between written language and at least my spoken language. Because I need a lot of punctuations in order to be able to say something understandable. So, we go through it and we have fun. And actually, we had fun with this one as well. So, on the morning of the judgments, we’re sitting in my office as we very often did, going through it one last time.
JAVIER ESPINOZA: Did you ever rehearse for a win?
MARGRETHE VESTAGER: No, we never rehearsed for a win. And it’s 9.30. And it’s always 9.30 on a Wednesday when the court opens and they open their live stream. And they come out and they start reading the judgments. And they started reading, and I was like, do we really have to listen to this? You know.
So, he got up and he said, okay. I’ll listen to it in the front office. And then a few seconds passed. And then he almost fell back into the office and said, I think we won. I think we won. And we were like, no. Yeah, yeah, yeah, I think.
And then we could hear, so they have to pay the cost, and they have to pay the cost, and they have to pay the cost. And that’s a sign that you have won. That someone else will have to pay the cost. And it was like an explosion. And it was not only the joy of winning. It was also the relief of not losing. Because that was what had been building up, that we would lose it. So, the relief of not losing was also that gave you these wings, because it was amazing. And then, of course, we had to turn around. And since the text for the press room was also very much about other things that has happened, we didn’t have to do the whole thing. But we had to do something within 45 minutes or something like that.
JAVIER ESPINOZA: What a great thing to have to rewrite your failure speech to your big win speech.
MARGRETHE VESTAGER: Oh, my God, yes. Just imagine had it been the other way around.
JAVIER ESPINOZA: And I bring up this particular case, first of all, because it was, I would arguably say, the biggest win in your mandate, maybe, or arguably, let’s say.
MARGRETHE VESTAGER: I think so, because one thing is an antitrust case where a business has done something illegal, and they have to pay a fine. When it comes to taxation, it’s a different thing. Because everybody pays their taxes. So, you have a completely different identification with a tax case than when a case where a company have done something illegal.
Because you don’t identify in the same way. And everybody, I think most people at least, know that if all companies paid their fair share of taxes, you could have better welfare services and whatever, or lower taxes for everybody else. So, I think because of that, and because the sum — well, not for Apple, actually, but for most companies, and for people like you and me, is an enormous sum. You know, including interest, I think it’s 14 billion euros. It’s a lot of money. So, you can identify, it’s a lot of money. And a loss would have been so significant. And all of that makes a case iconic.
JAVIER ESPINOZA: And this case is also important, and I bring it up not only to reminisce, but because the world in the last few days and weeks has changed dramatically. And now we see the CEOs of Apple, and Amazon, and all these companies that you went after, front row at the inauguration of now President . And I wonder what is your reflection as to where you got the EU to be, and where we’re heading? Because now, what I’m trying to say is that Big Tech is sort of bringing the political shield with Trump and Musk to counter the EU’s actions. I mean, it’s clear.
MARGRETHE VESTAGER: But it’s not the world that has changed, it’s the American presidency and the American administration that has changed. A lot of the world is the same. Climate change is the same. It hasn’t changed at all. 2024 was still the warmest year ever on record. The issue with China, they are still the same. India’s ambitions, they are still the same. The potential of countries on the African continent, still the same. So, the question is, how do you deal with another president who has a different approach than his predecessor?
JAVIER ESPINOZA: A radically different approach.
MARGRETHE VESTAGER: A radically different approach, yes. But still, it’s not the entire world. Because a lot of the world is the same and still needs your attention. You wouldn’t think so if you look at the Danish news, I can tell you. But there is a world out there that still needs your attention. And businesses still need open markets in order to thrive and to do their business. And people still need social media that live up to the laws of the countries.
So, in that respect, there is something that is as it was before. That has not changed. The U.S. approach has changed dramatically. But a lot of things are the same and they need the same effort in order to succeed. Because they are our values and they are our interests.
JAVIER ESPINOZA: I mean, Trump went to Davos already remotely and was referring to the EU’s action against tech as a tax. You know, you and him have a history when it comes to the tax reference. But he was pointing to EU action against Big Tech as a way of taxing these companies.
MARGRETHE VESTAGER: But that is not a discussion that I will enter into because we have very different sets of cases. And yes, we do have tax cases. And the Apple case is the most iconic one. But the huge majority of cases — and we have lost quite a number of the tax cases. And we have closed them. It was one of the last things I did. And then we have the antitrust cases. Some of which are completely similar to what the DOJ and the FTC have been doing for the last years.
JAVIER ESPINOZA: Yeah. Like, for example, the Google ad tech case that you oversaw. What do you think should happen next? Because I have been following for now close to my sixth year the rhythm of how these cases go. And after the launching on official charges, I’ve observed a year later almost methodically comes a final decision. In this case, in the Google ad tech, it seems like everything is put on hold.
MARGRETHE VESTAGER: That I don’t know. And it’s for my successor to decide what will be the sequencing.
JAVIER ESPINOZA: But tell me, what do you think of the immediate reaction that we’re seeing from the EU with Trump? Some argue that it’s not been too forthcoming, that Europe should be stronger in their remarks, in the way they address the things. Trump, for instance, is now idealizing a bro culture. It’s being anti-woke. The narrative is quite radical, you would say.
MARGRETHE VESTAGER: But Europe has a lot of things going on in Europe. I think it’s really important to focus on that. Because as I said, there are so many things that are still ongoing in this world. And a lot of that take our attention to do our own things. You know, when we left it, Draghi had tabled his report. Letta had tabled his report. I had been working with my advisor and some in my team to see how can we help close some of the holes in the capital markets in order for businesses in Europe to be better able to scale. A lot of things are ongoing. And that should not be captured by what happens in the U.S. Because a stronger Europe is also a better partner to whomever that we want to partner with.
JAVIER ESPINOZA: So, you’re, I guess, describing a Europe that it’s the grown-up in the room that doesn’t have to immediately react to external noise.
MARGRETHE VESTAGER: No, I’m not labeling anybody as grown-up or not grown-up, not at all. I’m just saying that we have a lot of things to do. And if you’re engaged in an argument and a tit-for-tat, that will divert your attention from the important things that you have going on which are really, really important.
JAVIER ESPINOZA: I wanted to ask you about this new phenomenon, at least in modern society and democracy, of a billionaire influencing democratic outcomes. Some argue that Elon Musk actually has bought his way into the American presidency. How do you assess that as a phenomenon? I know that we have had businesspeople influencing government before in the U.S.
MARGRETHE VESTAGER: But I’m just watching this because it’s a constant feature of the American democracy that a lot of money goes in. What are they called? The Cohen brothers or something like that has also had a lot of influence. One could argue that maybe it’s better that it’s so obvious than what it was before.
My point is just to say that it’s a very different system. Most European countries would have quite strict laws about how much money can be received by whom. It’s not a new thing in the American political system that it takes a lot of money to win elections. It also happens at state levels. You need to fundraise and fundraise and fundraise a lot if you want to be able to make it.
And when we say, oh, he shouldn’t meddle, well, our democracies are strong enough for someone to come and say their opinion. Also, when they’re not a citizen of that specific country. You know, also when there are elections here in Europe, I think you could find examples where a neighboring head of state would actually cosign an op-ed or something like that.
JAVIER ESPINOZA: I mean, on that point, Musk was recently on a big screen talking to AFD supporters, saying about how Germany should not be shy about going back to its roots and talking about, you know, essentially meddling in the German elections by supporting sort of right-wing political group.
MARGRETHE VESTAGER: But it’s for everybody to see. It’s for everybody to make up their mind about it.
JAVIER ESPINOZA: But it’s a very influential voice that could sway people one way or the other.
MARGRETHE VESTAGER: But this is one of my surprises. Why is it that people think that when a man has money, it makes sense what he says?
JAVIER ESPINOZA: Yeah.
MARGRETHE VESTAGER: It’s more a general remark. It’s not specific with Elon Musk. Because he has done something I do find impressive, like SpaceX and he revolutionized the e-vehicle. It’s just the very idea that because you have money, you have a say. Our democracies are built on the very fundamental idea that every individual matters. That is the fundamental principle that distinguishes us from a number of other ways of governing, where the individual doesn’t matter.
JAVIER ESPINOZA: Well, this individual seems to matter more than others because he has more dollars in his pocket than most people.
MARGRETHE VESTAGER: Yeah, but why? You know, wisdom doesn’t come with income.
JAVIER ESPINOZA: And being good at e-vehicles, that does not make you competent in German local politics, I guess.
MARGRETHE VESTAGER: But I don’t judge. You know, I’m just saying you can see it. You know, we’ve had a lot of, I think, discussions in Europe about Marine Le Pen’s party being supported by Russian funds, hidden, covertly. It was not obvious. Was it a loan? What was it? So, it’s not a new thing that someone is trying to influence European elections. The point is that we, as Europeans, in the countries where we have our right to vote, can make up our own mind. Does this make sense or not?
JAVIER ESPINOZA: Yeah.
MARGRETHE VESTAGER: It has always struck me — as I said, I was very young when I entered into politics and I’d be careful not to be too impressed.
JAVIER ESPINOZA: What should the role of legislation like the Digital Services Act, that you know very well, have in dealing with this?
MARGRETHE VESTAGER: But the Digital Services Act, I think, with this is a bit, sort of, the Digital Services Act is specific because it’s asking large platforms. It’s sort of an asymmetric piece of legislation. So, if you’re a small business, you have very light touch. If you’re a big business, you have very light touch. If you’re a big business, you have real obligations.
And the obligations that you have are that you need to have a system to be able to take down posts that are illegal. It can be hate speech, as is illegal in most European countries — in all, I think. It can be excitement to violence and terrorism. It can be child abuse. You need to have that system and you need to flag to people whose posts you have taken down that you’ve taken it down so that they can complain about it and eventually go to the court. So, it’s basically a transparency system that enables member states legitimately to take decisions about what is illegal and also see that being implemented in our digital world.
And the second thing you have to do is that you need to make a risk assessment of your services. Can my services be misused to undermine democracy? Or can they be dangerous to mental health? And then you need to give researchers access.
So, it’s a piece of legislation that creates an infrastructure of transparency that allows our digital world, what happens, the discussions, everything, to be much more transparent. Because when it’s being discussed, some are being forced to take down whatever, of course, everybody gets concerned about that. If you live up to the Digital Services Act, if your post is taken down, you will know. So, you get this infrastructure of transparencies of what is actually going on. And I think that is really healthy since we have — there’s a lot of important things that happens online. That is what the Digital Services Act is for you.
And then, of course, the know your customer obligation.
If you’re a platform that sells goods and services, I think also really, really important because we see many more Chinese platforms in Europe. And a lot of the things they sell, it has been a huge story here in Denmark. Well, they have harmful substances. They break. They don’t function. All of that. And that is what the Digital Services Act also gives you.
JAVIER ESPINOZA: Just to stay on tech for a little bit longer before we talked about the EU economy and Draghi. DMA. It seems that activity on the DMA has temporarily also been brought to a halt. I mean, we can have hypotheses as to why that is. But during your tenure, was the lobbying super intense on the fines?
Mark Zuckerberg, who is now a fan of masculine energy, apparently, was being very explicit to get Trump to go to the EU to say, stop the fines. I mean, this is a level of lobbying that is, I don’t know, unprecedented, you could say, no? I mean, coming from the CEO to the President to go directly to the EU.
MARGRETHE VESTAGER: But no fines have been issued from the Digital Markets Act yet. So, I think it’s a bit premature. And also, you can live up to the Digital Markets Act and you will have no economic issue. You will have no fines. And it’s not a difficult act to live up to. Because it takes what is already in antitrust law and in unfair trading practices. So, existing obligations make those clearer with shorter deadlines and shorter ways of working. So, there are no surprises, none whatsoever. The only thing that it will add on is a much more speedy and much more effective way of working in order to keep the digital market open.
JAVIER ESPINOZA: I mean, the fines are there though as deterrent, right? Like they are in antitrust.
MARGRETHE VESTAGER: As they are, yeah, yeah, yeah. The point of legislation is not to issue fines. The point of legislation is to make sure that the market is working.
JAVIER ESPINOZA: So, Zuckerberg and his fears, are they overblown?
MARGRETHE VESTAGER: I don’t know. I don’t know what are the next steps in those cases.
JAVIER ESPINOZA: Yeah, but I just thought it was quite peculiar to have him being so open about it. I mean, the fear must be extreme. But what you’re saying is that there’s nothing to be fearful about if you comply with the law and with the existing rules, I guess, right?
MARGRETHE VESTAGER: Yes, if you follow the law, you have no fines. If you’re very, very concerned that you’re having fines, maybe you need to look at your behavior.
JAVIER ESPINOZA: So, I wanted to move now to the state of the EU economy, which is linked to Draghi and linked to merger control and all the good stuff that you know really well. But before we get into it, let’s just say over the last decade, what’s your assessment of your policies and how they contributed, or partly contributed, to the state of the EU’s economy today?
MARGRETHE VESTAGER: Well, there are three different instruments now with the Foreign Subsidies Act coming in as the fourth. So, merger control. You cannot buy yourself a cozy monopoly or duopoly. You need to accept to be challenged.
Antitrust, you cannot monopolize the markets with anti-competitive behavior. And state aid, if there is a need for aid, it must be done in a way so that competition is still intact. And the Foreign Subsidies Act, if you come into Europe and want to buy a company or you want to participate in tenders, well, you cannot just do that with foreign subsidies in your books.
So, all these instruments, the point is to enable competition to make sure that businesses are challenged. And economic history has shown us again and again and again that businesses do best when they are challenged. So, of course, competition law enforcement is part of making sure that the European economy is competitive.
But it’s not enough. It’s just a thing that you can never live without. So, if you wanted to have competitiveness without competition, I don’t think you can climb that mountain. But you can have competitiveness with competition law enforcement as the basic driver that makes sure that you’re challenged. If you look at what the Chinese just have achieved on AI with what is a deep seek.
JAVIER ESPINOZA: Incredible.
MARGRETHE VESTAGER: Yeah, with inferior chips, with far, far, far less economic investment, you’d say this is what competition brings you. Someone felt challenged and they try to catch up. They use whatever they can. And sometimes, of course, this is also the dynamics you see in innovation, that some have moved forward, done something incredible with a lot of effort. And then those who comes next, well, they can do things in a much lighter way, but that shouldn’t take away that it is really impressive. Because they have not had the GPUs that others have had. They have not had the means that others have had. And yet, they seem to have produced something that is at par with some of the American large language models.
JAVIER ESPINOZA: I guess that could also give hope to Europe that they can achieve something similar, I guess, if I understand.
MARGRETHE VESTAGER: I would definitely think so. But it shouldn’t take the attention away from Europe also focusing on embedding AI in what is still a European stronghold, which is the production of machinery, all kinds of machinery. Because one thing is sort of software, large language model, chatbots, whatever. But the second element is, of course, how to optimize all the kind of machinery that we use for health, for instance, to work much, much better because you embed AI in them. And that is a European focal point.
JAVIER ESPINOZA: And so, the state of the economy competitiveness, Draghi – Letta, but Draghi, I guess, more substantially, really gave a diagnosis of where we are. Part of what he was talking about was this idea of big is better. He was nuanced about it, but he singled out telecoms as an industry that needed consolidation. What’s your thinking now, with some distance, about what he was saying on this particular industry?
MARGRETHE VESTAGER: But I think the same. It would be great if we had a European telco single market. And if there is to be finger pointing, it is towards the member states. Because you need to be much more forthcoming when it comes to common spectrum management in order to enable telcos to harvest efficiencies. Because as it is now, when you have national market in Europe, it’s very difficult for a cross border merger really to harvest efficiencies.
And that being said, I think it’s still so that the four biggest telcos, they organize 60 percent of subscribers. So, it’s not as in the U.S. where it’s really, really expensive. It’s still cheap in Europe. But you have the same sort of construction of few big ones and then a lot of smaller ones. That you see in the U.S. as well. Only competition is much more limited in the U.S. which gives you much higher prices.
JAVIER ESPINOZA: We’re seeing a renewal of a topic or a discussion that you saw for a decade, but it’s taking a new wind or a new air on this idea of European champions. That’s why I was mentioning telcos. How should the Commission and the services resist this temptation and the pressure that’s growing? The candidate for chancellor in Germany, he was pushing and saying we need an overhaul of merger rules. Big is good, better. How do you see that? I know that you have discussed this subject extensively, but we’re in a new sort of Commission, new U.S. pressure.
MARGRETHE VESTAGER: But one needs to nuance that discussion because big companies have been created via mergers under my watch. Quite a number of them. Stellantis being one of them. The Thales Alstom being another one of them. The world’s biggest beer brewer being one of them. What is characteristic is that they are still being challenged in what they consider their home market. And that is the point. So, are you saying that big business should not be challenged anymore? That’s one discussion. And then, of course, you need to change the merger rules.
If you say we want bigger businesses, but we still want them to be challenged, then you’re all good to go with the existing merger rules. And I think it is interesting to see how have big businesses innovated in Europe? They only do that when challenged.
JAVIER ESPINOZA: So, in other words, we don’t see or you don’t see an immediate need for a massive — and you’ve talked about this Pandora’s box, that it might be more harmful to change things than not.
MARGRETHE VESTAGER: But it’s very difficult to make that comparison because mergers are something that is created in the boardroom. And so far, they say, oh yeah, but the reason you prohibit so few is that so many mergers they stay in the boardroom. But the first thing you need to consider in a boardroom is what is it that we want to achieve with this merger?
Because if we want to achieve that we own this market with no challenge, well, then it should not be allowed. Because then you’re undermining the dynamic of the economy. And everything in Europe should be done to enhance the dynamic of our economy. Europe is aging. There are fewer and fewer Europeans. In every country they’re discussing demography. If you also, in the business community, want to take away dynamic, you will never realize the ambitions for a competitive, dynamic, innovative Europe that can play a full role in the geopolitics.
JAVIER ESPINOZA: I guess people, the businesses, that I speak to and the ones that you heard many, many, many times, are just making a renewed push that they need to be consolidated because the enemy is so big now that we need to get to action and find the synergies and make it big so that we can compete with China and the U.S. That has been the argument. It’s not new. It’s not the first time you’ve heard this.
MARGRETHE VESTAGER: No, but it was also the argument in the Siemens-Alstom prohibition, which is sort of the poster case for this discussion.
JAVIER ESPINOZA: I was rewatching your press conference.
MARGRETHE VESTAGER: Yes.
JAVIER ESPINOZA: It was quite interesting.
MARGRETHE VESTAGER: So, back in the days, it was also that China will come because the Chinese train companies are enormous. Because they’ve had internal mergers in China. I think they are now left with two in such a gigantic economy.
So, what we found back then was that huge part of that merger was fine. Only two markets was not fine. And that was mainline signaling, which is a very important market because everybody in Europe are renewing their mainline signaling in order to increase efficiency of their rails. So, faster, better use, et cetera.
And the second one was very high-speed train, also very important market. Everybody hopes that we will get very fast speed train connectivity between bigger cities in Europe. The companies couldn’t or wouldn’t solve these two problems. I don’t know what happened inside of that. I just registered that they could not solve it. So, we had to prohibit. So, we revisited. What is that? A year ago, or something like that. Saying, okay, what happened?
JAVIER ESPINOZA: Why did you revisit?
MARGRETHE VESTAGER: Because it kept coming back. And a lot of people don’t have time to hear why was it that it was prohibited?
JAVIER ESPINOZA: It kept coming back as an example of something that you shouldn’t have blocked?
MARGRETHE VESTAGER: Yes. Despite the fact that we had a huge train merger later.
JAVIER ESPINOZA: With one of these parties involved.
MARGRETHE VESTAGER: Exactly. Just sailed through, no problem. Nobody knows. So, we revisited the one we prohibited.
JAVIER ESPINOZA: Because in fact, you were not in the business of prohibiting deals. You banned — on average, you vetoed one deal per year.
MARGRETHE VESTAGER: Yes, something like that. I think in total 15 in these 10 years. So, we revisited to see, well, did the Chinese come? But the Chinese are nowhere outside of China. And when you look at the global market, there are two champions. And those are Siemens and Alstom.
JAVIER ESPINOZA: So, history proved you right, basically.
MARGRETHE VESTAGER: So, history proved that we took the right decision because now there are two European champions on the global train market.
JAVIER ESPINOZA: We cannot predict the future. But we can see the trends and we can identify, obviously, if Siemens and Alstom kept coming back — and I’m hearing from France and Germany, this push will continue to come back and back. Do you think we’ll see or are likely to see another test case like that during the next five years?
MARGRETHE VESTAGER: I don’t know. But it all depends because every merger case is specific. And as I said, Siemens and Alstom would not solve the two remaining problems. And then we had to prohibit. So, if they come and say, listen, we really want this merger. We think there are great efficiencies. And because of that, we want to solve the competition problems that may arise. Then you have a situation that is new and then you relate to that.
JAVIER ESPINOZA: Okay. So, I guess just to finish on merger control, what can we say in terms of what the next five years hold for — you were there, planning, outlining the sort of things that killer acquisitions, all these things that even though it’s for your successor to carry out, you were thinking about this thing. So, what can we say?
I know we talked a lot about the things that we shouldn’t do and the mergers that we should allow, shouldn’t allow. But what can the EU do in merger control to help the bigger goal, which is to be competitive and have a thriving economy?
MARGRETHE VESTAGER: Well, they need to figure out how to make sure that small thriving companies scale instead of being swallowed up. So, we had the defeat and the use of Article 22 of the merger regulation that we could call in mergers that was notifiable. Because very often you have a tiny company that is being swallowed by a big one. And part of that may be to prevent future competition or to harm innovation, which is really, really important if you want a dynamic economy, that needs to be solved. But the most important thing for Europe is not in competition enforcement, that is in making the single market work. That is real core of competitiveness and dynamic. That is what is important.
JAVIER ESPINOZA: And we’re running out of time, but how do we do that? Because I’m sure that was a question that you had even ten years ago. How do we solve the single market issue?
MARGRETHE VESTAGER: Well, the first thing you do is that within the Commission, you have a one Commission approach so that you don’t leave it to someone in one to take care of single market or few to take care of single market. You need to, if you’re in environment, if you’re in fish, if you’re in energy, wherever you are, you always need to think about the single market. Well, what I plan to do to solve whatever issue enable the single market to work. If so, you’re good to go. It’s excellent. If what you want to do will fragment the single market, back to your workbench.
JAVIER ESPINOZA: But surely that thinking has been there and was there when you were there already.
MARGRETHE VESTAGER: But for instance, if you look at some — it’s quite trivial — labeling issues. So, a member state says we have an obesity crisis. We want labeling on our products. So, we invent a labeling scheme just for us. Now everybody will have to put this label on their products, which means that they have fragmented the single market. Because if I produce cake, I need to repackage or put another label, if I want to enter your market. I cannot just do with European labels of origin or if it’s organic or not.
So, it’s important when it comes to everything you do, if you fragment the single market or if you support the single market. Because the single market is like having a lawn. If you don’t mend it every week, then first come weeds and then come trees. And I know this because I have a house in Sweden. And when we bought that thirty years ago, there was a beautiful, maybe not a lawn, but at least potentially you could have grown potatoes or something like that. And now there is a forest because we did not take care of it. And then the trees comes marching in. And the same happens in the single market. That just this barrier and just another barrier and then the third barrier. And all of a sudden, it’s so fragmented that the dynamic goes away.
JAVIER ESPINOZA: So, in a way, don’t focus just on this narrow debate of giants and big is good. Fix the real core, which is…
MARGRETHE VESTAGER: Fix the market. And the more dynamic a market you have, well, of course the more businesses can merge because they will still be challenged. And it’s from challenge innovation comes. It’s from challenge that strive comes. It’s not from being coddled and protected and taken care of.
JAVIER ESPINOZA: It’s still just a little bit abstract. Because fixing the single market you said is thinking and you mentioned labelling. But exactly what is it that you have identified as the next thing that the EU needs to do in the next five years? You were thinking about this a lot.
MARGRETHE VESTAGER: But I think Letta nailed it. I think he got it really right on a capital. He calls it savings and investment markets, which is a way of relaunching the capital market.
JAVIER ESPINOZA: Which we have been talking about for a decade.
MARGRETHE VESTAGER: For a decade. And this is why instead of just imagining the elephant, then you should just start bit by bit. You know, engaging family funds and family offices and what have you in order to show what is a European capital market? How does it work? Because there is a missing ticket between 30 and 50 million where businesses, they fail to get it if they want to scale in Europe.
JAVIER ESPINOZA: A radical different sort of culture from the one in the U.S.
MARGRETHE VESTAGER: And that is a problem. And then do it in a way so that it’s not the Commission saying, give me your money and I will decide what to do with it. But for the Commission to take part with other investors with arm’s length so that the investment is in businesses that actually has potential and can make things happen.
JAVIER ESPINOZA: And is the Commission there mentally? Structurally? Like the machine?
MARGRETHE VESTAGER: Well, I think so. It’s also not for — because I don’t want to brag about it. But there is — one of the things I left was a proposal that is ready to go. We have talked with some of the big family offices and some of the big foundations. They’re more than willing to participate.
JAVIER ESPINOZA: What is this called?
MARGRETHE VESTAGER: It’s called the European Pioneer Fund.
JAVIER ESPINOZA: Who is overseeing this?
MARGRETHE VESTAGER: It is Sessionet and it’s number two in the President’s office. I forgot her name. Which is a good thing that it’s not beyond because it’s such a bottleneck.
JAVIER ESPINOZA: Yes, as we see more and more. Okay, Sessionet, which you have a good relationship with him.
MARGRETHE VESTAGER: Yes.
JAVIER ESPINOZA: I’m interviewing him actually as well in Spanish. He’s got an Argentinian accent apparently.
MARGRETHE VESTAGER: Oh, wow.
JAVIER ESPINOZA: He doesn’t want to do interviews in English for some reason.
MARGRETHE VESTAGER: So, you speak Spanish?
JAVIER ESPINOZA: Yeah.
MARGRETHE VESTAGER: Impressive.
JAVIER ESPINOZA: He apparently grew up in Argentina. I didn’t know that.
MARGRETHE VESTAGER: Oh, wow.
JAVIER ESPINOZA: So, that’s good for me.
MARGRETHE VESTAGER: Yes.
JAVIER ESPINOZA: Okay, so as we wrap up this and we’ve gone in all different directions and the single market being the last thing that we talked about, what would you say if you were at the helm now for the next five years, and the single market was one, but what if we think about competitiveness and the economy, what is the biggest challenge for Europe?
MARGRETHE VESTAGER: Well, as any interesting problem, there’s not one single thing that will solve it. Unfortunately, there are no silver bullets. So, you need to fix the market. You need to have sufficient capital. And you need to think about education and talent. This is one of the reasons why I find it truly inspiring to be here. So, this university, two years in a row, has been the best technical university in Europe. And yet, nobody really knows.
JAVIER ESPINOZA: So, you’re now raising the profile.
MARGRETHE VESTAGER: Yes. But we need to be proud of what we have. To engage people’s imagination as to what we can achieve if we engage in it, Europeans get so depressed so easily. That is not the road to a dynamic, competitive continent.
JAVIER ESPINOZA: Yes. And maybe not for the podcast, but I’m interested in, now that you’re even more so an international speaker, and you were already, what is it that people want to hear from you? So, now that you go to the U.S., what message do you bring?
MARGRETHE VESTAGER: Well, actually, in the U.S., they are much more intrigued to say, Europe has so much. Why don’t you get it going for yourself?
JAVIER ESPINOZA: You’re probably one of the very rare faces that they identify with the concept of Europe.
MARGRETHE VESTAGER: Yes.
JAVIER ESPINOZA: You’re like an unofficial ambassador for the continent.
MARGRETHE VESTAGER: I don’t know. But I’m definitely, in my own view, officially here to make sure that we do what we can to make this continent much more dynamic.
JAVIER ESPINOZA: So, what do you go and say? What do people ask of you?
MARGRETHE VESTAGER: No, but people ask everything. They ask about geopolitics. They ask about artificial intelligence. They ask about the DMA and the DSA. They ask about how does the Commission work? For many people, Europe is a black box.
JAVIER ESPINOZA: Yes, I guess you got so well-versed in this black box. I’m sure there were even things that you didn’t even know how it worked, right?
MARGRETHE VESTAGER: No, but after ten years, there are things that I don’t know how it’s working.
JAVIER ESPINOZA: So, for an audience that’s so far away, that they refer to the EU as a government, the European Commission. So, a lot of misunderstanding. So, that’s where you’re bridging the gap.
MARGRETHE VESTAGER: For instance, the very basic that the European budget is one percent of European GDP. And the U.S. federal budget is, I think, 36 percent of U.S. GDP. It’s incomparable.
JAVIER ESPINOZA: Yes, incredible. Thank you.
MARGRETHE VESTAGER: That being said, one of the things I’m really proud of are the important projects of Common European Interest.
JAVIER ESPINOZA: Yeah, we didn’t talk about that. How do they fit in?
MARGRETHE VESTAGER: They fit in because they enable risk-taking and being more dynamic and risk-taking at two sides of the same coin. So, these important projects, they enable businesses to take risks that they would otherwise not have taken because governments step in and because you create an ecosystem. So, that it’s not only the businesses who get support to take risks that they would otherwise not have taken. They also create an ecosystem of smaller businesses, universities, research organizations. So, that knowledge is spread. So, that everything gets to a higher level. And within the last six years, I think, we enabled a total private and public investment of 106 billion euros. It’s more than the Horizon Project. And as I said, the point is to make also businesses do things that are risky with their research organizations in order to move the whole thing forward.
JAVIER ESPINOZA: It goes back to this idea of single market as well, right?
MARGRETHE VESTAGER: Yes.
JAVIER ESPINOZA: Because you have groups of clusters of countries, public and private, and different sectors.
MARGRETHE VESTAGER: So, it is in batteries. It’s in microelectronics. It’s in hydrogen. It’s in health. It’s in the cloud. So, you see that there is something dynamic happening.
JAVIER ESPINOZA: Lovely. Thank you so much.
MARGRETHE VESTAGER: Well, thank you.
