Margarete Vestager European Commissioner for Competition visiting Washington
It’s a great pleasure to be here in the US.
When I come to Washington, I feel like I’m on familiar ground. Because one of the nice things about being the European Commissioner for Competition is that you get the chance to work with a lot of very smart and dedicated people here in the US. I get to learn about different perspectives and approaches and that the US jurisdiction is not always the same as the European jurisdiction.
Still, my work has a lot in common with what the FTC and the Department of Justice do here in the US. On both sides of the Atlantic, we enforce the antitrust laws and review mergers. And we often find ourselves working together to solve the same cases.
One side of that is about merger control. If a merger significantly reduces competition, the companies that are left in the market could increase their prices, or stop trying to improve their products. So we may have to ask the companies that are merging to sell part of their business. We may even, very occasionally, have to block a merger.
Another aspect is the way we deal with cartels. Cartels raise prices by an average of 10 or even 20%, so there’s a lot at stake for consumers.
That is why we work with the Department of Justice to coordinate our investigations on international cartels, like the worldwide cartel in automobile parts, which the DOJ calls “the largest antitrust case in history”.
In the EU, we also have rules on State aid – in other words, subsidies that EU governments give to business. Subsidies can come in different forms: as a favourable loan, as a piece of land or as fiscal advantages given selectively to a company.
EU state aid rules have been in force since 1958 and apply to all EU Member States and to all companies that choose to operate in the EU Single Market. State aid rules ensure that companies can compete on equal terms on what we call our Single Market. This is also a question of competition and fairness.
No one should be denied a fair chance to compete. This includes innovation/start-ups and small companies. We have those rules because a government shouldn’t be able to make a hand-out to a particular corporation or a particular sector. Subsidies can cause serious problems for competition in the EU but also globally. It can deny other businesses and start-ups a fair chance to succeed, even if they can produce better products at lower prices or bring new ideas to the market. This is the reason that we regulate subsidies in the EU – and the reason that there are rules about subsidies also at international level.
An example that you’ve heard of recently is the decision that Apple’s tax benefits in Ireland are illegal under state aid rules. Our decision explained that two tax rulings granted by Ireland artificially reduced Apple’s tax burden for over two decades. This is a breach of our EU state aid rules. Apple has to repay the benefits that they illegally received. This is a bill for unpaid taxes of benefits worth up to €13 billion, plus interest. A government cannot give special tax treatment to certain companies that are not available to others.
So to restore fair competition, we ask the governments to reclaim the unpaid taxes. We have taken a number of decisions about illegal subsidies by way of tax rulings and schemes. And we continue this work. Just today, we opened an in-depth investigation into Luxembourg’s tax treatment of the French electric utility company GDF Suez group – now known as Engie. Our concern is that tax rulings issued by Luxembourg may have given GDF Suez an unfair advantage over other companies, in breach of EU state aid rules.
Enforcing our rules is just like applying the antitrust and merger rules – you look at the evidence, and you enforce the law. And the aim is the same as with all competition rules – to protect consumers and give all businesses a fair chance, by making sure the market is fair. Our rules are not new. Companies operating in the European single market are well aware of the rules.
We have a different history in the US and Europe, and we don’t always do things the same way. But I think our goals are very similar: We want to protect competition and consumers
Compliments of the EU Delegation to the United States.