Subscribe to read:

Margrethe Vestager on holding Silicon Valley to account

Upgrade your account to read:

Margrethe Vestager on holding Silicon Valley to account

Life & Arts

Margrethe Vestager on holding Silicon Valley to account

Over Danish herring smorrebrod, the cartel-busting EU antitrust commissioner explains why big tech has a ‘special responsibility’

© James Ferguson

Margrethe Vestager moves along the corner table’s leather banquette and sits down beside me, our knees almost touching at right angles. She’s smiling. I stare at the knife, fork and aquavit glass neatly laid opposite, and the empty wooden chair she has breezed past. Our table in a cosy basement restaurant in Copenhagen comfortably seats four; we’re sharing space for one-and-a-half. This, I think, is what it’s like to be wrongfooted by the world’s canniest antitrust enforcer.

The experience puts me in fine company. It is not even three years since the 49-year-old moved from Danish politics to the European Commission but she has already smashed almost every EU cartel-busting, fine-setting, back-tax-chasing record going. There is arguably no corporate regulator in the democratic world who wields such unchecked power, nor any that is so willing to use it, as the EU’s competition commissioner. Just ask Tim Cook of Apple (ordered to pay Ireland €13bn in backtaxes) or Sundar Pichai of Google (fined €2.4bn for abuse of dominance), or the assorted truckmakers, drugmakers and financial kingpins caught in Vestager’s cross-hairs. Her rulings can only be overturned by a court years later.

Her legendary toughness is leavened with homespun personal touches. It all makes for Vestager profiles that read like the saga of Queen Margrethe III, Viking conqueror of Silicon Valley, hammer of tax-dodgers, tamer of corporate super-egos, knitter of elephants (they are gifted to aides, sometimes with big ears to encourage them to listen), and renowned baker of cinnamon buns.

Vestager, it has long been clear, is a politician who defies gravity. She hails from a small party in a small country, and once campaigned under the charmingly anti-populist slogan: “Listen to the economists. That’s what we do.” Quick-witted and urbane, she was the inspiration for the hit Danish TV series Borgen, a liberal icon who to her admirers is better than fiction.

But in the US, Vestager is a portent of the political winds turning against Silicon Valley. To many there, she is the latest embodiment of a long tradition of busybody Europeans standing in the way of good old American business. Last year Cook delicately summed up the alternative view of her activities: “Total political crap.”

We’re sitting in the Kronborg, an old basement tavern turned restaurant, which is known for its smorrebrod, Danish open sandwiches. It’s just the sanctuary on a rainy Copenhagen afternoon. There are dark timber beams overhead. The walls are whitewashed, save for a pine-green trim.

Vestager looks at home, elegant in a light-burgundy dress, black cardigan and long gold necklace. Her steel-grey hair is neatly cropped. The staff seem rather proud to host the former deputy prime minister. I see the birthday party of thirtysomething women on the table opposite giving us ever more curious glances. They probably remember her from her time in the 2011-15 coalition government of Helle Thorning-Schmidt, a social democrat with a touch of flair. Elected on a left-leaning platform, Thorning-Schmidt almost immediately alienated her base by governing as a fiscal hawk. The main reason: Vestager, a junior coalition partner with a dominant say on policy. She knew what she wanted and largely got it. The relationship duly soured. Vestager says she’s on much better terms now with the “amazing” Thorning-Schmidt. “But I tell you, the fights we had . . . ”

It was an implausibly powerful position for the leader of a niche social liberal movement — affectionately known as the caffè latte party — whose electoral heyday was a heady 15 per cent vote share in 1968. But in coalition talks Vestager cleaned up. I note the contrast between now and Vestager’s first lunch with Thorning-Schmidt, some 20 years ago, at a café nearby. As they parted, Vestager offered her telephone number, saying: “You may need this one day.” Thorning-Schmidt took it, but didn’t respond in kind. Vestager, one presumes, wasn’t important enough. “Yes!” says Vestager. “I’d forgotten. That’s a very, very, very long time ago.”

I pick up the menu hoping one of the nine variants of herring might have improved since I last looked. I’m no fan. We both go for the special: Sol over Gudhjem, smoked herring with egg yolk. I then opt for steak tartare while Vestager picks Denmark’s equivalent of chicken vol-au-vent. “It is the tradition you drink . . . ” says Vestager, giving a mildly disapproving look at the two aquavit glasses. We both stick to water.

Vestager grew up in the small railway town of Olgod (literally “beer good”), near the flat, weather-beaten west coast of Jutland. Her parents were both Lutheran pastors, but also politically active. Noting the shared clerical family background with Angela Merkel of Germany, Britain’s Theresa May and Condoleezza Rice, the former US secretary of state, I wonder if there is a pattern.

“At least in Denmark, you’d usually say that the children of the priest are the worst,” she says with a laugh. “They have to rebel. Since my home was never so strictly religious, there was very little to rebel against. If there is something — I don’t know the different churches — it might be engaging in other people. That’s a very strong value.”

The herring arrives. The late RW Apple Jr, a legendary New York Times correspondent, described Danes as having a mastery of form and colour that “turned sandwiches into still lifes”. Our first course isn’t quite that, but it is much tastier than I expected. The yolk placed at the top of the plate brings a touch of sunshine to the leaden weather.

“You’re supposed to take the yellow of the egg and put it out here,” she says, leaning towards my herring. The fillets of brown fish are dressed with red onion and radish; Vestager starts with the onion one, but leaves her yolk.

By Vestager’s telling, she almost fell into politics. “I started running for parliament in the late 1980s and I only did that because it was completely safe, there was no risk of election,” she says, noting her first attempt was in a seat where her mother was once a candidate. “I was quite shy as a young person and I just felt curious in testing what it would be like.”

By age 25, Vestager was party president while holding down a job in the finance ministry. By 29, without ever having been elected, she was minister for education and ecclesiastical affairs. “I didn’t realise that I was young, I didn’t think about it so it didn’t scare me,” she recalls. “If I had realised, it would have scared me . . . It was a very tough thing and if I were to do it today I would do it differently.”

Vestager’s political persona, to some extent, emerged from her low points at the top. Her early years as party leader were dreadful, with rock-bottom polls blamed on her aloof, detached manner. “She was born an adult!” decried one party colleague then. Vestager concluded it was time to adapt. She realised she could “do something else” so may as well stand for what she believed. Finishing a mouthful of herring, she explains she adjusted to “push other sides of herself forward . . . and maybe take other sides a little back.” It was a form of controlled authenticity that her old spin-doctor compared to an oyster: enticing and honest, but only as open as she wants to be.

Any visitor to Vestager’s office in Brussels will understand what that means. It is an expertly curated space of curios and props. There is the plaster middle finger — “the f***-finger” — given to her by a trade union protesting against cuts, the “Vestervej” road sign, images of the windswept flatlands of Jutland where she grew up. Each object has an authentic story, but seems to reveal little about the person.

Vestager is reputed to be a master of “meeting technique” to bring big egos to earth. She knows her brief and brings no notes. She pours the coffee for guests. She barely changed her expression in 2016 as Cook railed against her investigation of Apple’s tax affairs, which he likened to justice in Venezuela, his voice steadily rising. Gazprom executives were told to cut their entourage to fit the table — leaving three-quarters of the delegation in the corridor. One witness recalls Vestager letting their meeting overrun for 15 minutes, in spite of repeated reminders. They walked outside to see Jack Lew, then US Treasury secretary, stewing in the waiting room.

When I ask about her encounter with Cook, she sharply straightens her napkin. “I have a lot of different meetings and you can have a very different meeting with me because I don’t tell,” she eventually says, rather firmly. “One of the things I have learned is that important things are simple. I try to treat people the same because a lot of people come from smaller companies.”

I face similarly short shrift when I ask about her experiences of “mansplaining”. Gender politics is not a field she wants to enter, she makes clear. “I really feel sorry that men are not treated as women because it doesn’t allow them to talk about their children, what they think about them, why they have chosen to dress as they do, if they are a bad father or not,” she explains. “If they were asked the same kind of questions, they would be able to show much more of themselves because I have realised that it doesn’t seem to be any different. This is a fact of life as a mum in my position so I say, well, bring it on.” She fixes me with her eyes.

The big gripe for Brussels lawyers over Vestager is her tendency to turn her quasi-judicial role into a pulpit for “fairness”. In one speech she famously referenced Luther, Adam and Eve and the greed at the heart of monopolistic behaviour. She clearly feels the criticism is misplaced. “I don’t have Luther’s 95 theses on my door; I have European competition law. This is what we work with. But the thing is that no matter who you are and no matter what you do, you can consider the ways you’re doing it.”

Her defining challenge on that front may be the giants of Silicon Valley: Google, Apple, Facebook and Amazon. All four have had very public brushes with Vestager, and she has been feted from Berlin to Washington for taking them on. The charge against her, though, is that her interventions (especially on tax) were more grounded in politics than law. Some executives cannot stand her self-righteousness. I press her on whether her queenly prerogative — as investigator, judge, jury and executioner — is too great. She brushes it off, arguing the courts, lawyers and media are there “to keep her honest. I feel very much checked,” she adds.

The lively hubbub in the restaurant is softening a touch. The birthday party opposite is opening presents; our plates are cleared. I change tack. An academic debate is raging over whether the old tools of antitrust — and the orthodoxy of the Chicago school, which focused on the adverse price effects on consumers — are sufficient to capture the dramatic changes we’re seeing in society and the economy. Free products may, in other words, be exacting a heavy price, while competition-compliant mergers (say in agribusiness) may be a bad idea for other environmental reasons. I ask whether she would, ideally, want a broader remit to defend a wider definition of consumer welfare?

She gives a Goldilocks answer: the principles in EU law are broad enough. “The consumer also has to realise that they always pay. I may not have to type in all the numbers of my credit card, but I still pay,” she says. “To some degree some of these companies are very old-school advertising companies in a completely new dress. Some of the things that they do, they are amazing. These are innovations that have changed our societies. But that doesn’t change the fact that they still have a responsibility. If you’re a dominant company, you have a special responsibility.”

That’s a reference to Google, a company she ruled against for abusing its dominance in search to favour its own shopping products. If the case stops Google discriminating but leaves the consumer experience worse, will she still be satisfied? “Who am I to judge?” she replies. Choice in itself, she says, is a good thing.

We’re halfway through the second course. Vestager breaks off from the finer points of competition law to explain her tarteletter, two crisp shells made from a buttery dough and laced with creamy chicken and asparagus. “This is what was served in any festive situation where I grew up,” she says. “It was never fresh asparagus, that would be a luxury beyond us. It would be tinned and the gravy would be made from the liquid of the tin. I love it.” My seasoned steak tartare — with rye bread hiding underneath — is delicious.

Her big tech cases caught the limelight, but in pure welfare terms they are not a touch on the truck cartel she cracked, which not only fixed prices but stunted technology to reduce emissions. A whistleblower has raised similar allegations about collusion among carmakers. Should the commission have been more active at an earlier stage? She notes the car-parts cartels the commission has punished over the past decade.

“It’s almost without end,” she says, raising her eyebrows. “In that respect it has been on our agenda for ages, but the emissions scandal is not really an antitrust thing. It’s part of maybe fraud, environmental, that kind of stuff . . . Now we have leniency applications on a possible car cartel, maybe with very intense co-operation. We have started looking at it. But we have used a lot of resources in that sector already.”

One of the stranger secrets of Brussels is the extraordinary clout of tiny Denmark. Its population is smaller than London’s, its voters have a distinct Eurosceptic streak, yet somehow Danes have for decades had remarkable sway in Brussels. So what is its secret? After a brief show of modesty, Vestager grabs the pen out of my hand and starts drawing. “They [Danes] never knock on doors saying, ‘There is this Danish issue and we really want you to know,’ ” she says, neatly colouring in a small square. “What they do is make a very thorough analysis and then say: ‘Oh, this is not good. Oh, it is part of a much bigger picture.’ ”

A large rectangle appears around the small square. “So they knock on doors and say: ‘We think you have an issue here. Can we help you?’ You figure out how to help each other then, oops, the problem goes.” She shades in the whole box. Then she sketches a map of Denmark, tracing a circle around the peninsula that looks like a giant halo.

“Here you can show your mental size, that you can see what others might be worrying about then carry your concerns to a common solution. For Danes, for us, there’s no contradiction between things being of absolute importance to us and things of a European scale also being important. Same thing.”

She will end her term still in the prime of her career. Some colleagues speculate she covets being director of the International Monetary Fund. Others would love her to be the next Commission president, but it’s a long shot. Liberals rarely get the top job and she hails from a non-euro country with lots of opt-outs. “It is another world when you can have a social liberal becoming a president of anything,” she jokes. Well, it sounds like a joke but I’m not sure.

With a last observation about the black bread, she’s off, walking alone into the drizzle. She leaves me to look at her half-finished coffee, neatly folded napkin and the halo hanging over Denmark.

Alex Barker is the FT’s Brussels bureau chief @alexebarker

Illustration by James Ferguson

Copyright The Financial Times Limited . All rights reserved. Please don't copy articles from and redistribute by email or post to the web.