Brus­sels’ most power­ful wo­man ta­kes on Goog­le, by Gre­gor Pe­ter Schmitz.

Handelsblatt Global Edition Magazine - - Table Of Contents - BY GRE­GOR PE­TER SCHMITZ

The Eu­ro­pean Uni­on’s power­ful an­ti­trust chief is cracking down on Goog­le. And ta­king on App­le, McDo­nald’s and Star­bucks.

Goog­le’s se­arch en­gi­ne is ex­tre­me­ly po­pu­lar in Eu­ro­pe, whe­re it has 90 per­cent mar­ket sha­re.

Next to An­ge­la Mer­kel, Marg­re­the Ves­ta­ger is Eu­ro­pe’s most power­ful wo­man. A Da­nish na­tio­nal, she heads the Eu­ro­pean Com­mis­si­on’s an­ti­trust unit, which has ta­ken on so­me of the world’s most power­ful corporations, in­clu­ding Gaz­prom and Mi­cro­soft. If com­pa­nies don’t com­ply, they risk lo­sing ac­cess to Eu­ro­pe’s mar­ket of so­me 500 mil­li­on con­su­mers. Now, Ves­ta­ger has ta­ken on Goog­le, which over 90 per­cent of Eu­ro­pean in­ter­net users use to se­arch the web, for its al­le­gedly dis­cri­mi­na­to­ry se­arch prac­tices.

Han­dels­blatt: Ms.Ves­ta­ger, do you en­joy a fight? You’ve be­en in of­fice ba­re­ly a ye­ar, and al­re­a­dy you’ve in­itia­ted an­ti­trust ca­ses against App­le, Goog­le, McDo­nald’s and Star­bucks. Ves­ta­ger: I ha­ve to thank the foun­ders of the Eu­ro­pean Uni­on. They left no doubt in the foun­ding trea­ties how im­portant com­pe­ti­ti­on is [in or­der] to en­su­re that the strong don’t op­press the weak. And that the law of the jung­le doe­sn’t ru­le in Eu­ro­pe. I try to li­ve up to the­se prin­ci­ples.

So­me people think you ha­ve so­me­thing against lar­ge, suc­cess­ful com­pa­nies.

Not at all. On the con­tra­ry, I con­gra­tu­la­te all com­pa­nies when they are able to attract a lot of cust­o­m­ers. But my en­thu­si­asm ends when they ex­ploit their mar­ket po­wer.

That’s what you’re ac­cu­sing Goog­le of do­ing. Goog­le has ta­ken ad­van­ta­ge of its do mi­nan­ce in se­arch re­quests.

Es­sen­ti­al­ly, it is a mat­ter of whe­ther I, as a cust­o­m­er, can trust Goog­le – na­me­ly, that a se­arch en­try will show me the best pro­ducts and not the pro­duct that Goog­le wants to pro­mo­te. Af­ter all, the ser­vice may be free, but we pay for it as cust­o­m­ers by pro­vi­ding da­ta or loo­king at ad­ver­ti­sing.

Can we as cust­o­m­ers re­al­ly com­plain? We’re the ones who ma­de com­pa­nies li­ke Goog­le hu­ge in the first place.

I use Goog­le mys­elf, sim­ply be­cau­se it is the best ser­vice pro­vi­der. But that ma­kes it all the mo­re im­portant to ma­ke su­re that such a gi­ant keeps to the ru­les.

So­me ha­ve ac­cu­sed you of pri­ma­ri­ly fo­cu­sing on Ame­ri­can com­pa­nies.

[It] has not­hing to do with an­ti-Ame­ri­ca­nism, as so­me U.S. in­dus­try re­pre­sen­ta­ti­ves sug­gest. And it isn’t a tac­tic for di­ver­ting at­ten­ti­on away from the fact that we Eu­ro­peans ha­ve to catch up in IT. We fi­nal­ly ha­ve to ma­ke mo­re ven­ture ca­pi­tal avail­able for tech foun­ders in Eu­ro­pe.

Mem­bers of the EU par­li­a­ment are cal­ling on you to break up Goog­le as a com­pa­ny.

Our com­pe­ti­ti­on law is strong enough to be able to de­al with any com­pa­ny, no mat­ter the si­ze. It is my job to en­force the law. Any spe­cu­la­ti­ons bey­ond that would be de­tri­men­tal.

You’re al­so pro­bing Goog­le on tax is­su­es, such as its spe­cial de­al on back ta­xes with the Bri­tish go­vern­ment.

The gre­at ma­jo­ri­ty of com­pa­nies in Eu­ro­pe pay their ta­xes ful­ly and on ti­me. Na­tu­ral­ly, it’s up­set­ting that so­me com­pa­nies ap­pa­r­ent­ly don’t.

Is that the fault of corporations? EU coun­tries out­do each ot­her with tax de­als try­ing to attract com­pa­nies.

The­re is not­hing at all wrong with coun­tries com­pe­ting with each ot­her in cor­po­ra­te ta­xa­ti­on. What is wrong is when in­di­vi­du­al com­pa­nies in cer­tain coun­tries on­ly ha­ve to pay in­fi­ni­te­si­mal­ly low tax ra­tes. That’s when I ta­ke a clo­ser look. If it is a mat­ter of an il­le­gal go­vern­ment aid, then we can re­qui­re that the coun­tries de­mand it back, even amoun­ting to bil­li­ons.

That will on­ly re­al­ly chan­ge when coun­tries stop this com­pe­ti­ti­on.

We are ma­king pro­gress. Ye­ars ago as Da­nish fi­nan­ce mi­nis­ter, I was try­ing to achie­ve mo­re Eu­ro­pean tax co­ope­ra­ti­on – in vain. But now tax-sa­ving pa­cka­ges are being re­stric­ted EU-wi­de, and the ex­ch­an­ge of in­for­ma­ti­on bet­ween tax aut­ho­ri­ties is being mas­si­ve­ly im­pro­ved.

Your Da­nish home­land, long a bas­ti­on of li­be­ra­lism, is now cracking down on re­fu­gees. What hap­pe­n­ed?

As a Eu­ro­pean com­mis­sio­ner, I don’t want to get in­vol­ved in na­tio­nal po­li­tics. But I can re­mem­ber how li­nes [of people] used to form up to 15 ki­lo­me­ters long at the bor­der cros­sings. That gi­ves an idea of what is at sta­ke in Eu­ro­pe, po­li­ti­cal­ly and eco­no­mi­cal­ly. We need a Eu­ro­pean so­lu­ti­on to the re­fu­gee pro­blem – the pro­tec­tion of the EU’s ou­ter bor­ders, a mo­re equi­ta­ble di­vi­si­on of re­fu­gees, as well as re­pa­tria­ting people who earn no pro­tec­tion.

An­ti­trust czar Marg­re­the Ves­ta­ger says Eu­ro­pe has a lot of ho­me­work to do if it wants to catch up in IT. Gre­gor Pe­ter Schmitz is Ber­lin bu­reau chief for the bu­si­ness ma­ga­zi­ne Wirt­schafts­Wo­che.

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