The Coronavirus and the Future of Big Tech

“We really mean it when we say that you should be able to trust technology when you use it, 
that this is not a start of a new era of surveillance,” Margrethe Vestager says.
She hates the United States perhaps worse than any person I’ve ever met.” This was President Trump’s assessment of Margrethe Vestager, the Danish politician who, as the Commissioner for Competition, leads the European Union’s antitrust division. Over the past five years, Vestager has become known for her attempts to regulate the tech industry. Her office’s investigations of Apple, Facebook, and Google have resulted in billions of dollars in fines for anti-competitive behavior and tax avoidance, garnering praise from those concerned about big tech’s power, as well as complaints from business leaders and some American politicians.

When Vestager’s second term began, in November, 2019, her job expanded to include digital policymaking for the European Union. In addition to enforcing antitrust laws, Vestager now oversees policy related to cybersecurity, big data, and artificial intelligence. In recent months, the spread of covid-19 has presented a number of challenges for Vestager’s office, including widespread unemployment, pharmaceutical price-gouging, and the use of digital technology to track the virus.

Vestager has also warned of potential Chinese takeovers of European businesses in response to the economic conditions brought about by the coronavirus.

I recently spoke by phone with Vestager. During our conversation, which has been edited and condensed for clarity, we discussed how the coronavirus may force a trade-off between privacy and health, her disagreements with Elizabeth Warren about how to regulate the tech industry, and whether politicians make the best technocrats.

What is life like in Brussels at the moment?

Well, it’s very strange, because we are busier than ever, and the world outside is at a standstill. I was out on the terrace having breakfast this morning. The weather is beautiful, and it was as if I was in nature. Birds were singing, there was a dog barking, no traffic sounds—none of the city sounds whatsoever. It’s really strange.

Are you working from home, or from one of the E.U. buildings in Brussels?

I’m part of the business continuity essential people team, so I go to the office every day. Ninety-five per cent of all [European] Commission staffers are teleworking. We really found that our I.T. support are our unsung heroes, because before the lockdown we had three thousand people teleworking, and now I think it’s about twenty-six thousand people. It’s an amazing endeavor, and it works.

Of course, it’s very, very stressful for the people who are at home with their children and worried about their loved ones, and having to be teachers and caretakers and working at the same time. But work continues, and it’s very intense.

What does your job mainly consist of right now, and how much has it changed in light of the coronavirus?

Right now, we do a lot of state aid control, because, basically, from the 10th or 12th of March, we realized that this was going to be really, really, really tricky for all of Europe. So we used two articles in our treaty in order to authorize massive, massive aid for businesses. That has been our main focus: aid to isolate and just to keep people employed.

Then we have ongoing antitrust investigations. We have allowed for corporations to insure a supply of generic drugs, while at the same time we look into the complaints we get when people are worried that there is price gouging, and then we also still have ongoing merger investigations. We also have a few of them where we’ve had to stop the clock because of lack of information, but the work is ongoing. The economy and being part of the Commission crisis-management team—those are my main occupations.

Over the next months, and maybe years, people are going to increasingly view privacy and public health as being in tension with each other. Has your view of how to approach privacy changed at all?

I think that is a false dilemma, because you can do so many things with technology that are not invasive of your privacy. I think that, very often, when people say it’s only doable in one way, it’s because they want the data for their own purposes. We have made a set of guidelines, and with member states we have translated that into a toolbox, so that you can do a voluntary app with decentralized storage, with Bluetooth technology.

You can use technology to track the virus, but you can still give people the freedom of choice, and, in doing that, people trust that the technology is for virus tracking and not for any other purposes. I think it is essential that we show that we really mean it when we say that you should be able to trust technology when you use it, that this is not a start of a new era of surveillance. This is for virus tracking, and this can help us open our societies.

You used the word “we,” but a lot of the companies that are getting involved in contract tracing, such as Apple and Google, are companies whose honesty you yourself have called into question previously. Is that a concern?

Well, obviously, the giants will have to be involved, because the operating system’s basically their domain. Actually, I find it quite encouraging that Google, with Android, and Apple, with iOS, tend to think about a decentralized system. I think the important thing here is transparency, that third parties have access to the technology and can vouch for it. We have authorities of different kinds, because, obviously, this will have to be very close coöperation between many, many parties, because the point is that we want to open our society. We want people to be able to travel again, and cross borders, and for apps on different phones with different operating systems to work with one another. That is of the essence. It has to be a collaboration between many different parties.

Is this something that your office is starting to think about, and do you have specific concerns about it?

Oh, we think intensively about this. The cross-border issue is one of the essential things, because one thing is that if you tend to trust your own government, you might voluntarily accept a centralized storage of data, but would you also do that in a neighboring country, where you are not part of the democratic control?

The cross-border issue, and being able to track the virus when you travel across a border, that is of the essence. It’s not exactly the same as in the United States, but many, many people work on the other side of the border from where they live. There’s a lot of going back and forth. There’s a lot of transportation, and of course there’s lots of tourism, and tourism is a very important industry for many European countries. Of course, you want to have a system where people could be alerted if they had been close to someone who later proved to be infected.

I’m surprised that you don’t have more concerns about some of the companies moving into this space, because of things you’ve said in the past and your offices levying fines and penalties and opening investigations into them.

Yeah, but the trick is, here, it is not blind trust. It is trust based on transparency. I think that’s the most important thing, and I think it’s a good thing that everyone in a global situation like this can do something that is really useful. I definitely think that it is doable.

You have been speaking out about your concern about takeovers from Chinese corporations, some of them allied with the Chinese government, of European companies. What about that concerns you?

My fundamental mandate is a level playing field, and equal treatment is our bread and butter. If someone comes here acquiring companies, and maybe does that for the wrong reasons, then I find that that’s not what was supposed to happen. Europe is indeed open for business, and, as many, many businesses will know, also a huge number of U.S.-based businesses, it’s a good space to do business, but it should be on fair terms.

For instance, if you come as a state-owned or state-backed foreign company, where your credit line basically comes from state coffers, then you are in a very, very different position than your competitors would be. I think it is important to signal that we are vigilant, and of course also to say that, if need be, of course we are willing to use the tools of screening of foreign direct investment, or, if need be, a member state could take a stake in a company if it’s the victim or the potential victim of a hostile takeover.

So your concern has less to do with the nature of the government in China or the competition between China and Europe than it does with the fact that many of these companies in China that would be pursuing the takeovers are state-backed in a way that American or European companies tend not to be?

Yes, exactly. It’s quite straightforward. It’s not a political judgment about their system. It’s more to say, “Well, this is simply not fair competition, if you come in and you have all the Chinese taxpayers backing you up.”

The E.U. recently watered down a report on Chinese government disinformation regarding the coronavirus. Have you been pressured to tone down your stance on Chinese takeovers of European companies at all?

No. I don’t know the other case at all. I heard about it on the radio this morning, so there’s that. I don’t know of anything.

Should there be a global pause on takeovers or mergers right now, putting aside the issue of China? Is that something that countries should be thinking about in terms of insuring a level playing field?

No, I don’t think so, because sometimes a merger is also a solution to something. We would want this recovery that we are preparing for to be both green and digital, and of course also, in that respect, to be able to do that, to make the recovery reconstructive, because it doesn’t really make any sense to rebuild the old world and then now make it green and then make it digital. Here, of course, you can see businesses might have an interest also in merging with other businesses. I think, no, even in a recovery phase, there can be absolutely perfectly fine mergers that we would happily clear.

Even though you’re talked about in similar terms as Elizabeth Warren, you’ve often been opposed to her proposals to break up big technology companies. Why is that, and are you still opposed?

Well, first from a very plain, practical point of view, how do you do that? How to make sure that you get companies split up? Second, you know the story about the hydra. If you cut off one head, I can’t remember if it’s two or five or seven, but at least you have more of what you wanted to get rid of.

It’s not a given that this is an idea that would reintroduce competition, because we are talking about markets with very strong network effects and with marginal costs that approach zero. Of course, you can consider different ways of carving it, but the risk is that you really wouldn’t get what you wanted, which is why we have been pursuing ideas of having new tools for the marketplace.

Is there not some inherent danger, though, with just the bigness that comes with some of these companies?

It depends quite a lot on how that is organized. One of the original problems in the first Google case was that consumers didn’t get the best product or the best service that they were looking for. [In 2017, Google was fined $2.7 billion after Vestager’s office alleged that the company was illegally promoting its own shopping service at the expense of competitors.] One of the things that has been painful is that, even with the things that Google has done—they got a fine to punish the behavior, and they were told that they had to stop that behavior and couldn’t put anything into place that has the equivalent effect, and they had to do something positive in order for competition to come back in this market of shopping comparison—that has only happened to a certain extent.

This is why we would consider, instead of ending in that situation, saying, “In markets where you have network effects, these are the nature of these markets.” It is better to say “What are the dos and the don’ts in such a market?” rather than pretending that these forces in these markets do not exist when it’s a fact of life.

How concerned is the European Union about Viktor Orbán’s government in Hungary and the degree of power it’s taken in the past several weeks?

It is something that is being followed very closely. It is not the legislation in itself alone. It is also how that legislation may be used. It is very much a work in progress, as you can hear. It’s not me firsthand dealing with this, but colleagues follow it very closely, and it is one of these things that we discuss in the weekly meeting where all commissioners are present.

Just speaking as a European and a person concerned about democracy, how concerning is it to you?

Well, it is indeed concerning, also because it has been ongoing for now quite some time. The situation in Hungary is not new, but, of course, what is happening recently has made everyone even more concerned. That’s also why we have had these discussions about the conditionality of being a member, that it’s a full membership. If you’re a member of the European Union, that, while you enjoy the single market, you have access to the different mechanisms of structural forms and cohesion forms, but you also signed up for fundamental values, and the rule of law is one very fundamental value in itself.

Rule of law is how we want our societies to work, full stop. It has lots of positive side effects, as well. One of the most important of those is of course that it makes our societies work. It makes the economy work, because you know that you have an independent court to go to for issues that can otherwise not be solved, and you have independent media to look at those who are in power and to make sure that they stay prudent.

You have been a politician, even though you’re often referred to or thought of as a technocrat. Is being a politician helpful to your job? Should we have more politicians in jobs like yours?

Well, I think, as commissioners, we all have a political background, and I think it’s very important because, in every job like this, the first thing you have to do is, of course, that you have to set priorities. Even if you had all the resources you would wish for, you still couldn’t do everything. Setting priorities is a political thing to do. That in itself, I think, makes it a good thing that you have this schooling, experience of doing that.

Of course, when we take the oath in Luxembourg, in front of all the judges . . . I counted this time, there were I think thirty-seven of them . . . of course, part of your political life you leave behind, because I serve every member state. I serve every European, no matter who they have put in government, because I’m obliged to the treaty. I think it’s a good thing, with the skills that come through the experience of having done politics for many years.

Do you speak much with heads of state in Europe, or are your communications generally with people at regulatory institutions in those countries?

I speak sometimes with heads of states. I speak a lot with ministers of finance, ministers of business, of energy, of digital, of transportation, and I speak a lot with C.E.O.s if they have an ongoing merger case, for instance. Then we are in close contact with the national competition authorities, with competition authorities overseas, like [the Federal Trade Commission and the Antitrust Division of the Department of Justice], the two in the U.S. at the federal level. We speak with data-protection agencies, but I’d say, on a day like this, it is primarily different ministers that I’m on call with.

The President of the United States said that you disliked America more than any person he’d ever met. Have you spent much time with him?

I haven’t ever met him.

Wow. That’s, I guess, not shocking, but kind of amusing if you’ve never actually met him. Do you know why he said that about you, or where he got that impression?

No, I don’t. I have travelled, not extensively, but some. I was invited many years ago on the International Visitors Program, and that was really an amazing experience, because I was in North Carolina. I was in Portland, Oregon. I was in New Orleans. I was in Sacramento. I was in Washington, of course. I saw the Grand Canyon, and, of course, I have been travelling to New York. I come from a country that really, really likes the U.S., where American culture is very much integrated in everything we do.

What was the point you were making in your last statement?

It was just to say that I really like the United States. It comes with so many things that are different from Europe and so many things that are similar. That is, I think, part of the everlasting fascination of the United States, that on one side you can mirror yourself. On the other side, you see something that’s just completely different.

Thanks for talking. Stay safe.

Yeah. Well, likewise. I think the unfortunate thing is that this may last for quite some time. And I don’t think that this social-distancing is healthy for us. I think it’s important to have a society where you can see each other and smile and touch and all of that. I haven’t seen the majority of my family since the ninth of March, so I would like to stop, as well.

Just to clarify, you’re not saying that people should not socially distance? Or are you?

Oh, no, no, no, no. Not at all, not at all. Of course, I think that sanitizing, social distancing, all of that, of course we have to do that, but I hope that, eventually, in a post-coronavirus society, that this will not be how we live forever as the new normal. I really hope that you stay safe and that your family is good, because it is quite shocking what we see from your country.

Isaac Chotiner