The EU’s Competition Czar Is Ready for a Fight With Google

Google Android Target of EU Antitrust Regulators
  • Google gets second warning in a year, this time over Android
  • Vestager tussling with behemoths including Gazprom and Apple

For all her daring, Margrethe Vestager has little to show for a year and a half after taking over as the European Union’s competition czar. That could be about to change.

The Dane, who recently turned 48, hit the headlines when she sent Google an antitrust charge sheet last April. She’s back in the limelight after sending another statement of objections targeting Android.

Margrethe Vestager
Margrethe Vestager
Photograph: Victor J. Blue/Bloomberg

“The enforcement pace has picked up” under Vestager’s leadership with “controversial and time consuming” cases, said Ioannis Kokkoris, a professor in law and economics at Queen Mary University of London. “She now needs to ensure that decisions are being made.”

Google isn’t the only behemoth Vestager is grappling with. She’s yet to come forward with conclusive results in a tax subsidy case against Apple Inc., her complaint against Hollywood studios, a pricing probe against Russia’s Gazprom PJSC and her review of Halliburton Co.’s plan to buy oil-services rival Baker Hughes Inc. She’s also taken on a fight with chip company Qualcomm Inc.

‘Borgen’

The daughter of two Lutheran pastors came to Brussels after a successful political career in Denmark, where she led the centrist Social Liberal Party. Her political life inspired “Borgen,” a Danish TV series about a female prime minister from a small party. The screenwriter is a family friend and the lead actress shadowed Vestager for the role.

In her new job, she has kept to a personal mantra. “To me, when I feel a decision is right, it’s when the head and the heart and the stomach agree,” Vestager says.

It’s preferable that she takes the time to come up with decisions that are “reasonable and justified rather than to issue a decision more quickly for political purposes,” said Tom McQuail, an antitrust lawyer at Morrison & Foerster LLP in Brussels. “I think she should be judged on the outcome of these cases -- whatever that might be.”

While last year’s complaint against Google’s shopping services was seen by many as a side issue, analysts and lawyers say this week’s case against Android has the potential to hit the search-engine giant where it hurts. It could be a sign that biding her time will ultimately pay dividends.

The business world also praised her common sense as she let several companies off the hook in cases that hadn’t been making any headway for years.

Wall Street

Wall Street titans including Goldman Sachs Group Inc. dodged possible fines as Vestager shut down a dead-end probe into how a dozen banks may have conspired to keep exchanges out of the credit-default swaps market.

Days later, the European Commission also sounded the retreat from an antitrust case that had embroiled some of the world’s biggest oil producers.

Vestager’s predecessor Joaquin Almunia handed out fines totaling about 1.7 billion euros in 2014 -- his last year in office. That compares with penalties of just 384.5 million euros from Vestager during her first year in the job, including a 20 million-euro fine charged to envelope makers shortly after she joined the commission in late 2014.

Even though she’s yet to wield billions of euros of fines in the antitrust arena, lawyers say she’s already made a clear impact on consolidation plans by Europe’s fragmented telecommunications industry.

First Signal

A Danish telecoms merger had to be scrapped amid EU opposition, the first signal Vestager is taking a tough stance on phone carrier combinations. The antitrust regulator is expected to formally block CK Hutchison Holdings Ltd.’s $14.5 billion bid for Telefonica SA’s U.K. mobile-phone business within weeks, two people familiar with the negotiations said earlier this week.

She’s also on her way toward making a mark with her fiscal decisions after ordering the clawback of unpaid tax by Starbucks Corp.

Despite mostly positive appraisals so far, Vestager will be judged, just like Almunia, on her ability to bring home the main cases associated with her name. That means fines or an acceptable settlement where Google agrees to change its behavior on her terms.

She has another three years to show she hasn’t bitten off more than she can chew.

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