Ihe plan to appoint Fiona Scott Morton as Chief Economist of the Directorate-General for Competition (DG COMP) – she renounced this position on Wednesday July 19 – sparked intense controversy, due to her American nationality and the risk of conflicts of interest due to her previous functions: she worked in the antitrust department of the American Department of Justice under the Obama administration and as a consultant for Apple and Microsoft. Beyond the controversy, this case reveals a more serious problem affecting DG COMP: the lack of results for more than twenty years in the field of digital and technology within the European Commission.
Its failure is at three levels: first, the lack of impact of its decisions on the emergence of gigantic digital monopolies. Out of 25 billion euros in fines in fifteen years, only around 3.5 billion have been paid, that is to say less than 1.5% of Gafam’s net income for the year 2022 alone. Never has their power been so great since the Commission agitated its reels: the market capitalization of the seven biggest tech companies reached more than 11,700 billion dollars [10 491 euros]including 4,000 billion more in 2022. What raises questions about the effectiveness of DG COMP for the market and European citizens.
Another reason for this failure could be the composition of the instance. The vast majority of its officials are trained as lawyers, with no real experience of the sectors they are supposed to regulate. However, an understanding of the scientific or technological springs is essential in the 21ste century to assess the relevance of the investigations launched and anticipate what will really harm healthy competition.
No questioning
Two examples where Brussels has seen almost nothing: the agreement to buy WhatsApp for 19 billion dollars by Facebook, for which the DG COMP notably considered, in 2014, that “WhatsApp and Facebook Messenger were not competitors”. Since then, Meta (ex-Facebook) has remained the leader in instant messaging.
Another example: the agreement given to the acquisition by Google of the start-up DeepMind, in 2014, an English nugget with a turnover of a few tens of millions of pounds and which has not been the subject of an in-depth investigation – but it is estimated that it concentrated nearly a third of the best European talents in the field of artificial intelligence.. Its acquisition has ruined competition in Europe in this field much more than any other transaction. The power thus gained by Facebook and Google did not lead to any questioning of DG COMP. Europe urgently needs to update its industrial and competition policies.
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