‘ WE ARE DOING THIS BECAUSE PEOPLE ARE ANGRY’
Margrethe Vestager – European competition commissioner and inspiration for the Borgen TV series – has been fearless in the fight for fairness against powerful corporations. As for Brexit, she says it has made the EU stronger than ever
In the unhinged 18 months since the EU referendum was called, I’ve listened to and made many arguments about the folly and hubris of Brexit, but I’ve never encountered any argument quite as compelling as the simple presence of Margrethe Vestager. I met Vestager ( pronounced Vest-ayer) in her office on the 10th floor of the curvy cross-shaped Berlaymont building in Brussels, home of the European Commission. The office is light and bright, with a desk facing a window, which spans the length of the room. There are modernist paintings on the wall beside a wooden stepladder (“If a woman wants to go places she should bring her own ladder”, she likes to say) and, on a low table, a white cast of a human hand with an upraised middle finger – an ironic gift from a Danish trade union. For the last two and a half years, this has been one of the few offices in the world in which billionaires fear to tread.
As European commissioner for competition, Vestager regulates commercial activity across the EU and, with her team of 900 investigators she has, since she arrived in the post in 2014, apparently been conducting an experiment in what a new world order – or at least a freer and fairer globalised market – might look like. The daughter of two Lutheran pastors from the flat and marshy Danish coast of Jutland, she tries to work with a simple liberal philosophy in mind: “Politics should give all people opportunities and enable them to make free choices.”
The full extent of this belief started to become clear in January 2016. Tim Cook, the CEO of Apple, arrived in this office to discuss his company’s European tax arrangements, which had long been claimed to operate through a shell organisation in rural Ireland. By some accounts, Cook made the mistake of trying to intimidate Vestager during this meeting. He interrupted her questioning to offer a brief, intemperate lecture on the appropriate attitude of governments to corporate taxation, an outline of the kinds of deals that had allowed Apple to operate so effectively in Europe and elsewhere in the past.
Vestager, who is both cheerfully engaged and resolutely unflappable, listened to these arguments, continued her investigations and then, in late summer of last year, came up with her own considered verdict on Cook’s idea of corporation tax. “Apple’s tax benefits in Ireland are illegal,” she said. Vestager laid out her belief that the corporation’s secretive deal with the Irish government amounted to state aid – the company paid tax at something like 0.005% – and that it therefore contravened European law. Apple, she said, owed the people of Ireland back taxes totalling a jaw-dropping €13bn (£11bn) plus interest. She served notice that the EU would be enforcing that payment through the courts. Cook called the judgment “total political crap”. Apple immediately vowed an appeal.
That salvo against Apple was only Vestager beginning to count the ways in which global corporations might finally be held to account by European democracies. She has also driven investigations of Fiat, Gazprom and Starbucks. The “Luxleaks” revelations, a cache of documents relating to corporate tax affairs in Luxembourg now in the public domain, allowed close scrutiny of the tax arrangements of McDonald’s and Amazon for the first time – remember all those lines on your bank statements reading “payment to Amazon EU Sarl”? – and Vestager’s rulings are imminent. Her team are also pursuing a case against Qualcomm (for selling computer chips below market price allegedly to drive competitors out of business) and in May, fined Facebook €110m (£94m) over the data mining of Whatsapp accounts, which contravened its takeover terms. There are also three separate antitrust cases against Google, which accuse it of using a mixture of algorithms and dominance to destroy competition. The first of these, which insists Google skewed its search results to favour its own online shopping services, led to a €2.4bn (£2.14bn) fine levied in June (against which Google is appealing). The others, including what Vestager calls the “real heavyweight one”, which alleges that the Android platform has built-in monopolies, are pending.
Vestager is not technophobic or anti- Silicon Valley – she is a long-term Apple user, and her face lights up when she remembers the first time she did a Google search – and neither is she antibusiness. Far from it. She just wants a market and a tax system that plays by the stated rules and pays its way.
“It is our suspicion that Google has been using Android to make sure it is dominant when we go fully mobile in search,” she says. “They do some amazing, innovative things, but they are really an old-school advertising business. The way their products are set up, you have to take their browser and their search engine. People then don’t go looking for anything else, so competitors never have a chance of showing us something else. And because the market doesn’t work, then nobody invests in innovation…”
Can you imagine Theresa May, too chicken to address the European parliament or, God help us, Liam Fox, having the wit or the gumption to hold Google or Apple or Facebook to account in these ways? While our government is sending secret billets doux to Nissan to keep them sweet in Sunderland, or begging letters to the CEOs of FTSE 100 companies in the hopes of getting them to say something, anything, nice about Brexit, Vestager has been quietly asserting her understanding that the political battles of the present and the future should not be among nations, but between democracies and globalised corporations, which for too long have had things their own way. Those
Sbattles can’t be fought by individual countries, because global companies just base themselves elsewhere. But if a market the size of the European Union starts to assert its collective interest, then the corporations might have to take notice, act fairly and pay tax. In that sense, Vestager is perhaps all of your Brexit regrets made flesh. he wears that mantle lightly. A tall, smiling woman of 49, she talks with unusual warmth and candour for a politician who is clearly relishing the role of enforcer. She takes me first through the detail of her office and the scope and limits of its power. Her 900 staff are divided among the three strands of her department: merger control, state aid and antitrust; there are also experts in different sectors – cars, pharmaceuticals, hi-tech, food and so on. Language and digital skills are obviously at a premium.
One of her directives – she only has a five-year term, though it can be extended by the Danish government – is to try to speed processes up as much as possible. There is a danger that companies will stall their way to avoidance, waiting for the new occupant of her desk. One result of that has been a sometimes overwhelming workload for the department. “When we do merger rulings, we have strict deadlines: 25 days,” says Vestager. “It is extremely intensive, and you must decide how you can do it, before your spouse says, ‘You know I still love you, but please spend some more time at home.’”
Vestager married Thomas Jensen, a teacher of philosophy and maths, in 1994, and they have three daughters aged 14, 18 and 21. Her efforts to juggle political intrigue and family made her a model for the lead character in Borgen, the Danish political TV drama. While Vestager was Social Liberal party leader and the finance minister in the coalition Danish government, Sidse Babett