to pay $14.5 billion in alleged unpaid taxes to Ireland and fined
Google a total of $7.8 billion for allegedly abusing its dominance to clobber rivals.
In June, President Donald Trump referred to her as the EU’s “tax lady” and said she “really hates the U.S.”
Ms. Vestager—who rejected Mr. Trump’s characterization shortly afterward, saying “I very much like the U.S.”—says in an interview with The Wall Street Journal that she never looks at the nationality of a company when cases are brought to her, and that the only thing that matters is for U.S. tech giants to play by Europe’s rules on competition and privacy.
More rules for companies dealing with data in the ever-digitizing economy and the Internet of Things could emerge after a report due in March, she says.
Here are edited excerpts of the interview.
Just obey the rules
WSJ: You made a name for yourself with high fines and tax probes against U.S. tech giants. Should Silicon Valley be afraid of you?
MS. VESTAGER: No, of course not. They should consider the way they do business.
This is our test: Do you serve the consumer or don’t you? That’s the most important point. As I see it, the huge majority do business by the book. They should know that there is such a thing as law enforcement. So that those who do not do business by the book, they would have to reconsider.
WSJ: Europe is creating this new privacy-enforcement regime, with data-protection authorities modeled on the existing competition authorities, including the fines system. Is this a model that you see being replicated around the world, and do you expect privacy-related fines on U.S. firms?
MS. VESTAGER: That remains to be seen. But with more and more global businesses, they have to consider whether they have ways of doing business based on the privacy model that is here or the one that is there.
If you make a parallel to the competition law enforcement, what you have seen over the last 20 years is a convergence among the different jurisdictions when it comes to competition law.
Of course deterrence is a big part of it. Since it takes some time to catch the guy who does the illegal thing, it’s better to prevent the illegal thing from happening. And this is why the level of the fine is important. The fine shouldn’t just be one line in your spreadsheet. It should be a big fine, with reputational damage from it. That’s also part of the logic behind the higher fines when it comes to privacy. Up to 10% of the global revenue, that’s the cap.
WSJ: You say it’s about the European consumer and the EU rules, but we have these big American players—
—and there is this impression that the EU is out to get them or to regulate them or to break them up. Does their behavior merit thinking about something like that?
MS. VESTAGER: I think it becomes a straw-man argument, so that we’re discussing something else instead of discussing the real thing.
This is not about your nationality. This is very much about being multinational. Being based in many countries, of course you have obligations wherever you go, with the rules made in those democracies where you do business. It’s not about where you come from, it’s about what you do when outside.
Protecting the small guy
WSJ: Is competition policy the right way to address big tech’s behavior when it comes to the use of data gathered?
MS. VESTAGER: It’s at least part of the solution. But it’s not the full solution. My colleagues responsible for the regulatory part of it tabled a proposal to oblige platforms to be much more transparent with their customers.
WSJ: But you suspect that sometimes the platforms have ulterior motives, say Amazon getting the data on customers and products and then cutting out smaller vendors?
MS. VESTAGER: The question is if that data is used for you basically to take over [a small vendor’s] business. You see what is trending and you say, “Wow, this is where I want to go.” And then it becomes very difficult [for the small vendor to compete with you]. We don’t know yet if this is an issue within competition law, but we want to understand it in full.
WSJ: There is often talk in Europe about why there are no European tech champions like Facebook and Google. Or why does a European company like Skype have to go to the U.S. to become big. China has created its own champions by barring U.S. giants from its market. Would that be a model for Europe?
MS. VESTAGER: If you look at the entrepreneurial environment in Europe, it’s buzzing, the startup environment is very strong. But the capital market is not as supportive as it is in the U.S.
The European Commission is working intensively to have what we call a capital-markets union, so that as a small business about to grow you don’t just have to go to banks—[it would be] much easier to get capital [and the management help that often comes with it]. That’s been lacking in Europe. It’s an underestimated barrier to growth.
WSJ: This being your last year in office, is there anything you want to accomplish by the time this term is over?
MS. VESTAGER: We are preparing deeper insights into whether we need more regulation. Three special advisers on the digital economy will come up with a report in March.
We’re also working [to upgrade our investigative technology]. For instance, in a raid, if we return to the office with 700,000 documents—to be able to process that, data-mine it, organize it so that you see where is the smoking gun in these 700,000 documents.
Ms. Pop is a Wall Street Journal reporter based in Brussels. She can be reached at email@example.com.