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Alphabet : EU Commissioner Who Targeted U.S. Technology Giants Gets Second Term--2nd Update

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09/10/2019 | 10:09am EDT

By Valentina Pop

BRUSSELS -- Margrethe Vestager, the Danish politician who has been the public face of the European Union's regulatory push against Silicon Valley, has been nominated for a second, five-year term as the bloc's competition commissioner.

The move was a surprise. Ms. Vestager was expected to hand over the competition role -- a powerful post with hands-on responsibilities for investigating and enforcing anti-competition issues -- as she ascended to a higher role in the commission. She will also take on an influential new role in shaping legislation for digital companies.

Ms. Vestager made a name for herself by slapping record antitrust fines on U.S. tech companies, including a total of $9.4 billion on Alphabet Inc.'s Google. She also ordered Ireland to claw back $15 billion from Apple Inc. in what the commission called unpaid taxes. That earned her the nickname "tax lady" from President Trump.

The division she has led for the past five years has pursued high-profile probes against Amazon.com Inc., Facebook Inc. and Qualcomm Inc., as well as non-tech American giants like McDonald's Corp., Fiat Chrysler Automobiles NV and Starbucks Corp.

Ms. Vestager is slated to become one of incoming European Commission President Ursula von der Leyen's three "executive" deputies, in a move that is expected to provide the new vice-president with extra clout in commission deliberations. Her mandate over rule-making related to the digital economy could give her even more influence over global tech regulation. Ms. Vestager confirmation by the European Parliament is widely expected.

The treat of heightened regulation in Brussels, and now Washington, has emerged as a key issue facing the West's big tech giants, dominated by American companies. Europe had long taken the lead over policing Silicon Valley in recent years, most notably in a sweeping privacy directive last year that has forced companies inside and outside Europe to adhere to strict rules on data.

But Washington has more recently stepped up scrutiny. Two separate groups of attorneys general are investigating Google and Facebook. Federal antitrust enforcers at the Justice Department and the Federal Trade Commission have separately trained their sites on Google, Facebook, Amazon.com and Apple.

With some of these probes overlapping in terms of focus, Ms. Vestager said in an interview she "always appreciated the cooperation" with her American counterparts, without committing to seeking any. She said, though she will "follow with great interest what colleagues are doing on the other side of the Atlantic."

Mrs. von der Leyen's administration has already signaled a push for new laws on emerging technologies such as artificial intelligence and the use of big data. It has promised action on this front within 100 days of taking office on Nov. 1. The commission, under Ms. Vestager, is already probing how companies such as Facebook and Amazon.com use data gathered on their platforms. Both companies say have done nothing wrong.

American tech companies have said they generally welcome greater oversight. Apple Chief Executive Tim Cook last year in Brussels attacked the "data-industrial complex" and called tighter privacy regulation. Facebook has touted its new efforts to police the content on its site.

But lawyers warned tech giants to brace themselves for more European scrutiny.

The commission's focus on "digital giants is set to sharpen further," said Alexi Dimitriou, competition counsel at Ashurst, a multinational law firm. "With her remit also expanding to coordinating wider digital policies, digital business should expect regulatory intensity to continue," he said.

In another important appointment, Ireland's Phil Hogan is slated to take over the bloc's top trade post, where he will be responsible for negotiating future trade deals with the U.K. after Brexit and with the U.S. Mr. Hogan, currently commissioner for agriculture, has been a tough critic of Brexit and the U.K.

He is also an ally of Irish Prime Minister Leo Varadkar, who, in a meeting with British Prime Minister Boris Johnson on Monday, repeated his vow to be Britain's strongest ally in securing a post-Brexit trade agreement with the EU.

Mr. Hogan will also inherit the looming threat of car tariffs, in addition to duties on billions of dollars of EU exports that the Trump administration has readied in a long-running U.S.-EU dispute over aircraft subsidies.

Asked about her strategy in the trade dispute with Washington, Mrs. von der Leyen said she favors dialogue over tariffs.

"If we start a tit-for-tat behavior where tariffs are concerned, others will have the benefit of it -- neither the United States nor the European Union," Mrs. von der Leyen said. She added that she plans to visit the U.S. shortly after taking office.

She officially unveiled other members of her new team on Tuesday, with the most powerful players -- led by Ms. Vestager -- focused on redesigning rules to help European companies compete with the U.S. and China and delivering a European version of the Green New Deal.

The commission, which acts as the European Union's executive branch, is in charge of negotiating trade deals, designing new rules and regulations for the bloc, as well as its top antitrust enforcer. Each EU country is represented by a commissioner, except the U.K., which is set to depart the bloc on Oct. 31.

As part of her Green New Deal pledge, Mrs. von der Leyen has promised an economic plan focused on combating climate change that envisions Europe becoming the world's first climate-neutral continent by 2050. She has tapped Frans Timmermans, a former Dutch foreign minister, to be one of her other top deputies, leading that portfolio.

"Those who act first and fastest will be the ones who grasp the opportunities from the ecological transition. I want Europe to be the front-runner," Mrs. von der Leyen said.

France and Italy, the second and third-largest economies in the bloc once the U.K. leaves, are getting influential positions: Sylvie Goulard, an early ally of President Emmanuel Macron and currently the deputy governor of the Bank of France, will be in charge of the internal market, defense industry issues and the digital single market. Italy's former prime minister, Paolo Gentiloni, will oversee economic affairs.

Mrs. von der Leyen's team of 26 commissioners will still face hearings in the European Parliament, which could result in some names being withdrawn or reshuffled before the new commission takes office.

The Parliament has already wielded some influence. Mrs. von der Leyen has put the Green New Deal at the center of her policy agenda in order to placate the rising number of climate-concerned lawmakers before they voted on her becoming the next commission president.

Mrs. von der Leyen has pledged to cut emissions aggressively to make the bloc carbon-neutral by 2050. She will propose a border tax on carbon to protect European companies against global competitors subject to less-stringent emissions rules. And she wants to transform the European Investment Bank -- the EU's lending arm -- into a green financier that would help underwrite EUR1 trillion ($1.1 trillion) of climate-related investments.

Mrs. von der Leyen will have to secure buy-in from the poorer Eastern European members, including Poland, that rely on coal to fire their economies. She will also have to bridge policy differences between France and Germany, with Paris pushing for a rapid transition, while Berlin advocates a more cautious approach.

Write to Valentina Pop at valentina.pop@wsj.com

Stocks mentioned in the article
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ALPHABET 0.41% 1240.03 Delayed Quote.18.67%
APPLE -1.94% 218.75 Delayed Quote.41.43%
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