The European Making Sure America’s Tech Giants Play by the Rules

The following is a condensed and edited interview with Margrethe Vestager, European commissioner for competition.

Why are U.S. technology companies getting so much scrutiny from you?
It goes for every industry, not only the tech industry. Just as we would congratulate any business while they grow and flourish and invent new things, if we see that they start to misuse their size and power to prevent others from growing and flourishing and investing in new things, then you have an issue with us.

Can companies gain an unfair advantage over competitors based on the data they hold?
It depends. If you merge two businesses, and by merging the sets of data it becomes de facto impossible for somebody to enter that business space, then you have an issue. We haven’t had those concerns yet, but we’re very much concerned that they will occur.

There’s an implicit contract with internet services. A person hands over data in exchange for the service. Is the collection of people’s data an area that deserves more government regulation?
It deserves a lot more attention, for people to realize that as always there is no such thing as a free lunch. There is no such thing as a free app. Obviously, you pay. And now you pay with your data.

The problem when it comes to paying with data is, it’s very hard to see what the exchange rate is. The reason I don’t use loyalty cards is that I find the exchange rate is very bad for me, because they get all my data—they know what I buy, they can figure out the age of my children, if I entertain guests, etc. But what I get is maybe a discount on washing powder that I don’t even want to buy. Why would I want that? Or I get customized shopping, which in my opinion limits my focus of attention, because maybe I would like to try something different than what an algorithm would suggest.

Google has been the subject of intense scrutiny by the European Commission. What would you like to see the company do differently?
We only open a case if we have strong evidence that a company is misusing its dominant position—that Google is promoting itself in neighboring markets [such as shopping] and not applying the same penalties [in its search rankings] to its products that it does to its competitors’ in those neighboring markets. From my point of view, I want the competitors to have a fair chance of making it. If you can’t present your innovations to customers, why innovate?

What if the competitors’ products just aren’t as good? People don’t seem to have a problem with Google’s quality.
That’s not the question. You don’t know if someone can come up with something better. Just because something is good doesn’t mean it’s the end of innovation. If it was, well then, we’d still be in horse carriages.

But isn’t there a choice? You’re investigating Google because people need to sign up for its services when they use Android. Can’t somebody download another search or e-mail app for their phone?
If everything is presented to you, then your impetus to look for something new is so much smaller. Android is a very good operating system—open source. But how Android is used seems to place customers in a lot of instances on a one-way Google Street. That’s because you want an out-of-the-box experience, and even before you start thinking there is something else, you’re in a 100 percent Google experience.