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CNBC Interview with EU Competition Commissioner, Margrethe Vestager

Following are excerpts from an interview with CNBC's Silvia Amaro and EU Competition Commissioners, Margrethe Vestager

SA: Good morning Commissioner. Thank you for joining CNBC.

MV: Good morning. It's a pleasure to be with you.

SA: I would like to start by looking at Google's shopping services. Now, you've taken a decision on this case, you've issued a fine, Google has already taken some actions to address your concerns and I believe that at the moment you're hearing from rival companies on whether the actions that Google took were sufficient. What are these companies telling you?

MV: Well, we've have that the first Compliance Report by Google. We, ourselves, are asking for quite a lot of data. And I meet with some of the people who are quite worried, to some degree frustrated. Saying well, there may be equal treatment but Google is so far ahead, because of the data, because there they are there already. Because they see what you will see with your own eyes that in the Google Shopping box it is quite rare that you find any competitors when it comes to, for instance, a price comparison. And of course, we take this very seriously. So we look into whether there is compliance or not.

Having of course taken no decision yet, but very thoroughly.

SA: In the past Microsoft failed to comply with a ruling from The European Commission and ended up seeing the original fine becoming nearly four times bigger. Similarly, could Google be found in the same position, if the commission believes that Google didn't take enough action?

MV: On the concrete case, of course I will not speculate, because this is open. But as a matter of principle, you're right. That if a company is not complying, then we can issue day fines from the day where we get the suspicion that there is no compliance. And then issue day fines till compliance has been achieved. So as a matter of principle of course, it's a very serious matter.

SA: There are two other investigations open against Google. Could you just give us an update on where you are on those two?

MV: Well of course they are unrelated. One is about the use of the Android, we think to stay dominant. Also when we all go mobile, so that as a phone producer you cannot have the Play Store without taking a number of the other Google products. And the third case is about AdSense: how to place that; what rules have Google set out in order to place ads. And basically you can say what the three cases have in common is that here you have the dominant company when it comes to search and we find that this dominant position has been misused to do things that a competitor would never be able to do.

SA: Can we foresee some sort of timeline when you will be able to come up with your opinion on the other two cases?

MV: Well actually I've learned the hard way that we have hardly even sort of internal timelines, because we find that sometimes we cannot upheld (uphold) these. Because we get new evidence on board, we get new questions, there is a need to redo drafting in whatever decision we are preparing. So unfortunately no, I cannot give you the deadlines.

SA: At the moment, society is super reliant on technology, to shop, to communicate, how hard is it for a regulator to keep an eye on digital services?

MV: Well I think it is tricky because society is developing almost as we speak. Because it's also agriculture being now digitalised. Transport, health, administration, everything; our entire society. And of course we're learning on the go. We have learned a lot in the last couple of years, not only from the antitrust cases, but also from fake news and AI. And we are seeing sort of more and more the fuller picture. And in the commission we're drafting new proposals both on the platform to business relationship, or business to platform relationship, on how to deal with illegal content, and how to deal with copyright issues in order to use this now more fuller picture to sort of make the regulatory framework so we do not get into a situation where we have sort of a Wild West, since it is about the entire society what's going on right now.

SA: I'd like to move on to the Irish case with Apple. Now last time that we spoke it was May of last year and at the time you told me that you would like to see Ireland recovering the 13 billion euros very soon. That hasn't happened. You've taken Ireland to the European Court of Justice. Still no money has been received. What's not working here?

MV: Well, to some degree of course I respect that it's more complex to have an account of 13 billion euros, than to recover 250 million, 30 million of unpaid taxes and some of other cases. So it's more complex. You need to figure out what to do in the meantime while the court looks into their appeal and that has taken some time. In our opinion it has taken too long. But from what I hear from the Irish, they are getting there. So of course we hope that soon, the recovery can happen in full, because of course if that happens we will withdraw the complaint that we have filled with the courts.

SA: Is there any other mechanism apart from taking the member state to the Court of Justice when we're coming to a tax ruling decision?

MV: Well that is in itself actually a very serious step to take. And what I feel from the Irish is also that they have the same sort of, 'we're a citizen in a union based on the rule of law, we really want to do this'. So I do hope that it will happen in the near future.

SA: And what are the consequences of such a delay in repaying the unpaid taxes?

MV: Well it's a question of the level playing field. Because to recover unpaid taxes is of course to restore competition. And this is why for us it's very important because it gives other companies a better chance, and of course more competition ends up as a better market to serve the consumers.

SA: Just one final question on this case, could Ireland be in trouble for not recovering the 13 billion euros on time or very quickly?

MV: Well of course we have, there is some discretion. And of course we look of the difficulties that is related to the case but it is important for us that it happens and this is why we say well on the process alone of recovery, unpaid taxes, we have asked the court to look into it. And at the same time of course we hope that the court will also make it a priority to look into the appeal of the case, because it's important for us for the court also to take a decision on this question. Because fiscal aid, well it's a very important issue when it comes to fair competition and a level playing field.

SA: On another specific case, on a merger, you're supposed to give your opinion on the merger between Bayer and Monsanto, but that decision has been delayed twice already, I believe. What could potentially delay this decision once again?

MV: Well we have a legal deadline that we have to meet. When a decision is postponed it's very often because the company gives us more time in order to discuss what remedies they have proposed in order to make our concerns go away. And for us of course it is very important that we are thorough, because it is for everyone, that food is well the most important thing. So for farmers to have a choice, affordable prices, not to be locked in with just one provider, these are the things that we are looking into. And that has to be thoroughly done because otherwise well, there will be consequences for each and every one of us.

SA: Is it realistic to expect an outcome in the first part of this year?

MV: Well we have to do that actually, because we have a legal deadline. There's this difference between the U.S. system and the European system that we have very strict deadlines that cannot be surpassed. Neither for the business side nor for our side.

SA: I believe that your mandate is coming to an end next year. What are you doing at the moment to ensure that there is going to be a smooth transition coming 2019?

MV: Well you can say first of all since I'm a law enforcer, and only a very very small legislator, I will have one proposal in these five years, to empower actually national competition authorities. I will be enforcing to the very last day. So you know I hope that I can hand over the baton to my successor. And of course to make sure that we work as one, because all the businesses who played by the book should have course feel comfortable that that we are, you know, stringent, and that no time is lost between mandates when it comes to make sure that you have fair competition.

SA: Is there any specific goals you have until 2019? Any specific cases that you would like to conclude before you leave this position?

MV: Well as many as possible because I think that speed is of the essence. Our society develops faster and faster. So does the market. So if we can process cases then for all the law abiding companies we make it easy for them to compete on quality of their products at prices that they can offer. Of course we have to do a high quality because we live in a union based on the rule of law. And hopefully also to do the relevant cases where things are most harmful. But that being said I think speed is one of the things that we really should continue to focus on.

SA: Given that we still have a little bit of time I would like to talk about the Gazprom case. I believe that you've done some market research. Based on that market discussions you've held, is there enough material to potentially open a formal investigation against Gazprom?

MV: Well you know when we sent them the statement of objection; we found that they had been petitioning the markets, demanding excessive prices. Gazprom wanted to engage, to discuss commitments. Can this be solved in a way to allow gas to flow freely at affordable prices? Or will we have to take another route? And the first set of commitments; we tested those in the market. Asked competitors and customers, do you think that this will work? And the good thing was that a number of people engaged, also with great nuance. And said well this might work, but this won't work and you have to change this. And now we're in the process with Gazprom to see well are they willing to take sufficient steps in order for this to work and that still remains to be seen.

SA: Lastly could we expect to see you as competition commissioner once again?

MV: Well you know I try not to show how much I like this job. Because it is truly a great job. And it relies on other people, but if they found that it would make sense of course I would be available, it would be an amazing thing to be allowed to do.

SA: Thank you very much, commissioner.

MV: It was a pleasure.

SA: Thank you

SA: Looking at the Gazprom case, I believe that you've had some market research on how the company interacts in Europe. Is there enough material to open a formal investigation against Gazprom?

MV: Well you know we sent them our statement of objections saying we found that we have the evidence to show that you have petitioned the market, yet you had demanded excessive prices. On that basis, Gazprom said well, we want to engage with you. And they sent a first set of commitments. Those of course we have tested with competitors and customers in Europe and specifically in the countries where we found that the abuse took place. And they came back, very nuanced, very broad comments, to say well this will work, that won't work, that will have to be improved in order to solve the case, which means that gas can flow freely at affordable prices. So now we are back with Gazprom to discuss and to see if they have the willingness to take the necessary steps actually to get this go, into real life that gas can flow freely at affordable prices. And it remains to be seen if we'll get there.

SA: Any idea on the timing when it comes to this?

MV: It's always tricky because it depends probably also on their decision making procedures but hopefully we'll get there sooner rather than later.

SA: Thank you.

MV: It's my pleasure.

ENDS

For more information contact Jonathan Millman, EMEA Communications Executive:

  • Jonathan.Millman@CNBC.com

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