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Europe shows a new way to think about regulating tech companies
Jul 14, 2021

Europe shows a new way to think about regulating tech companies

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Margrethe Vestager of the EU helped develop the idea of treating digital companies as "gatekeepers" if they stand in between consumers and other companies.

The European Union has led the charge on regulating Big Tech companies for years now. Europe’s General Data Protection Regulation was the first major rule on the transfer and tracking of personal data.

The EU has also given the rest of the world a new way to think about tackling the American giants: Google, Facebook, Apple and Amazon. Last year, the EU produced two proposals for regulation that labeled the biggest tech companies “gatekeepers,” meaning they control or restrict our access to other companies, apps or services.

Margrethe Vestager is the executive vice president of the European Commission and oversaw the proposals. In the second of a three-part interview with Vestager (the first part is here), I asked her how much of an innovation this new definition might be. The following is an edited transcript of our conversation.

Big Tech “gatekeepers”

Margrethe Vestager: It is an innovation, because we looked at our concept of dominance and said it’s not really good enough. We need something to describe that kind of market power, where you basically decide if other companies can get to the market or not. And this is why we have defined these gatekeepers, and then say, if you hold this kind of market power when you are a gatekeeper, then there are a number of things you must do and a number of things that you cannot do, because with great success also comes responsibility.

Molly Wood: And this is a flexible framework.

Vestager: Yes. It can be applied to companies who provide a number of digital services. It can also be search, it can be marketplaces. It all depends on your outreach. So for us, it’s about what kind of market power do you hold? And how can we enable these markets to regain its contestability so that other businesses, smaller businesses, all these many, many businesses who want to attract investors. And in order to attract investors, of course, you need to be able to go to the market and get to potential customers.

Wood: Gatekeepers have a tendency to say that the gates are there for your own good. Recently, you said of Apple that privacy and security can’t be reasons for anti-competitive behavior. And certainly consumers do want that, or that’s been a compelling argument. Do you think that there’s a version of privacy and security that needs to become the consumer’s responsibility?

Privacy and security “cannot be weaponized”

Vestager: Well, as you say, everyone wants privacy and security, but they cannot be weaponized to be used in an anti-competitive manner. I think it’s a question to open and straightforwardly to apply these concepts, while at the same time compete with others. For instance, I think it’s positive when Apple have these services that ask you do you want this app to track you while not using it? And if you apply the same concept to you as you apply to others, well, then things actually are quite OK.

Wood: I guess I have to ask you, did you ever imagine that globally recognized competition celebrity would be your claim to fame?

Vestager: No, no, no, no, no, no. Not in a million years. I grew up in the western part of Denmark, where it’s completely flat. It’s close to the sea. I hadn’t any kind of this carved out for me in any way. Then my parents would have thought of a name that was easier to be pronounced if you weren’t just Dane.

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The team

Molly Wood Host
Michael Lipkin Senior Producer
Stephanie Hughes Producer
Jesus Alvarado Assistant Producer