CNBC Interview with Margrethe Vestager, European Commissioner for Competition

Below are excerpts from an exclusive CNBC interview with the European Commissioner for Competition, Margrethe Vestager, and CNBC's Silvia Amaro.

SA: Good morning Commissioner.

MV: Good morning,

SA: Thank you for joining CNBC and hosting us in your office.

MV: More than happy to do that, welcome here.

SA: You've made many headlines over the last four years and a half, and I would like to read you a few: "The woman who is reigning in America's tech giants", "Who strikes fear into Silicon Valley? Margarethe Vestager, Europe's antitrust enforcer". How do you see yourself as a competition law enforcer?

MV: Well this is the job. Because if consumers, customers are to feel that they are empowered in the marketplace. When you find a business who are doing something illegal of course you will have to be the law enforcer. You have to be quite, you know, to the point.

SA: There has been a recurrent theme though during your term, that you after the big US tech giants. Does this bother you?

MV: It bothers me that it has-, has an address. Because I think, one of the reasons why a number of companies are doing great business in Europe is not because of their nationality. It's because of the services. It's because of their products. I would never think about, now I use a US product, I would think about wow this is a great phone, or this is a great service that works very well for me. So, for me it's about making sure that also giant companies respect the fact that you have a responsibility in the marketplace.

SA: You were-, just arrived from a trip to the United States I understand. Throughout your term, what sort of pushback have you felt from your U.S. counterparts?

MV: Urmmm-, It has been very different. I think, by now there is a there's more appreciation of the fact that we do things slightly different in Europe. Because the background of the tax cases is sort of the European prohibition against state-aid to just one company or group of companies that's not available for other companies. And err-, I think with the first tax cases that was a big surprise; that this was how we saw things. But I think, sort of over the years, that has grown and maybe not an understanding, but at least the knowledge that these differences are there and and this is why we do things in a different way.

SA: And in your opinion how do you think the U.S. authorities have allowed big companies such as Microsoft, Apple, Facebook and others to become so powerful?

MV: Well I think it's it is customers who allows a company to grow in size. Customers who love the products and who uses it more and more and more. This was the situation in Europe. What we have been aiming at is, of course, to see; well you're more than welcome to be successful, but you shouldn't misuse your success to deny others the chance to compete against you. And err-, and I think that's, that is also some of the differences, because you only have a case when you have a case. We have the three Google cases because companies have been complaining about Google behavior. We've had the Amazon's e-books case because people were complaining. So you grow because customers like you, but you get a problem with the law enforcer if someone say this is not right, this is not the way things were supposed to be.

SA: And over the last nearly five years as commissioner for competition what has been the most difficult case?

MV: Oh. Actually, most cas-, most cases are difficult. There is no such thing as a slam dunk case, I don't think that exists. It's all very complicated sort of on the legal side. It's all very complicated because so much data has to be processed in order to get the evidence of illegal behavior. So it takes a lot of work and they're all complicated but they're all very different. The Google cases are different. The ca-, tax case is different. But that being said, that it is difficult and complicated and challenging. I also think that it has been worthwhile.

SA: Why do you think that's the case?

MV: Because, because most businesses pay their taxes. And because most businesses they compete on the merits. They make an effort. And and I think it's a good thing to be able to say to all these businesses: when you do your best to serve your customers you do the right thing, and those who-, who do something illegal, they do the wrong thing.

SA: You have recently said that your investigation into Amazon's data practices is in advanced stages. Can we expect a final decision before the end of your mandate?

MV: Well as you know, we are it's sort of a-, It's a very sort of very first step to figure out, if we think that also formally we should have an investigation. One of the great things in the work we do is that people are very helpful. A lot of businesses have taken time and effort to give us data to answer our questions. So we very carefully go through this. But as I said we are advanced and I hope that we can sort of conclude the first phase within this mandate.

SA: I would like to move on to another recent case. Daimler has asked the European Commission to investigate Nokia's patents. Have you started looking at this complaint at all?

MV: Now, this is very early days. So in here I have I have no comment.

SA: OK. Now let's look at the digital tax then, because you've been one of the most supportive in Europe really, one of the biggest supporters for this policy, yet the European Commission didn't manage to get approval for its proposal. And I was wondering in your opinion what are the risks of taking too long to act to-, to apply really a common EU digital tax?

MV: Well I think it's-, it's-, it's a problem for-, for everyone basically, which is why of course we also pushes and hope for the OECD to-, to propose a global solution. Their sort of first thoughts looks very much like the thoughts here in the Commission, the proposal that's that we have put forward. I think that we take a big risk by not taking action. Because if corporate taxation doesn't sort of understand modern ways of doing business, modern ways of creating value, modern ways of being present in the country, then of course state budgets will lose out. And we also need the companies who have a very good business and create value in countries to contribute; to roads, and digital infrastructure, education, health; all the things that makes a society come together. And, also here you have many-, many-, many-, many businesses – the majority, they pay their taxes. And they have to look at digital businesses competing for capital, for skilled employees - sometimes for the same customers - and they don't contribute to the same level.

SA: Do you think it is realistic at all to imagine the European Union putting forward a common digital tax before the OECD comes up with its plan?

MV: Well, we keep pushing and what you see right now is the very unfortunate fragmentation. I completely understand the member states who say if we cannot agree on this together, then we will move forward. And that we see now in a number of Member States, and that of course makes it more difficult to be a business because then sort of the tax schemes they-, they-, they're not the same. You have to spend more time and effort to make sure that you get it right everywhere. So hopefully these member states initiatives can-, can push for an agreement among everyone that then can push for an agreement within the OECD. But we put a lot of effort into the OECD work because they are the-, the state-of-the-art experts when it comes to a push for changes in global taxation.

SA: Your colleague Commissioner Moscovici suggested, during an interview to CNBC actually, a couple of weeks ago, that the EU should-, it should change the rules and when it comes to taxation the decisions should be taken by qualified majority and not by unanimity. Do you think this is a good idea?

MV: I think it would help. And sometimes the paradox is that sometimes qual-, qualified majority helps you to get unanimity because if you know that you can be voted down, your incentive to be part of the conversation, to be part of finding solution, is much stronger. When you have unanimity, of course each and every one holds a veto, so you don't have to engage. You can just say, no I don't think so. When-, when there is a risk that the qualified majority will decide something, well better engage, better try to find a common solution. And at least where sort of steps has been taken already-, where steps have been taken already, you ought to be able to move for qualified majority.

SA: On the back of your decision to stop the Alstom-Siemens deal, France and Germany have said that competition law should become more political. What would be the impact on your day to day job if that was to move forward?

MV: Well of course it's very difficult to say because it's a proposal with without sort of a detailing yet. But, the thing is that, a union built on the rule of law is also reflected in the way we do merger control. Because every company is in the same process. Every company has the same rights of procedural fairness. Every company knows that they can go to court if they want to complain about our decision, that could be a competitor that could be the companies themselves. So of course if you introduce sort of political discretion in such a system I think it becomes maybe sort of more unsecure for a company to know well how how am I supposed to to maneuver this system. Because one of the important thing when when you're dealing with a merger control procedure is that you know exactly the steps so that you can prepare yourself that you know what you want to put out if there is a competition concern and you will have to remedy it. So, it's difficult to say but there's a lot of good things to be said about a predictable system, where you know every step and where equal treatment is on the very fundamentals.

[00:11:48]

SA: Still on this case on the back of your decision on the Alstom and Siemens deal. Some opponents said that your decision really risks having European companies falling behind China and the Chinese companies. What can the European Commission do to support the European companies in this race against China?

MV: Well when we ask for for fair competition within Europe, and this is what we do because it serves both sort of the business customers and us as consumers very well and have done so for many years. Of course if European businesses are met with unfair competition in the global market we want to stand up for them. And there is a number of things that we can do. I think it's about time Europe becomes somewhat more hardnosed as to how we'll do that. Both sort of when we work with other countries, I have a dialogue with China on harmful subsidies, my colleague Cecilia Malmstrom has tabled reforms of the WTO with US colleagues and Japanese colleagues. Those two things will not change things sort of overnight or in the next six months. So of course we have to do more. One thing to screen foreign direct investments to make sure that when investment happens you don't have security issues, that you are more precise when it comes to procurement, when people are invited to come and do business here when there's public procurement, well we would want European businesses to be invited to do the same kind of business in your country so that there is a reciprocity – if you can do things here, I want to do things with you. So a number of things to step up, sort of our role when it comes to also a global level playing field.

SA: How urgent do you think that is?

[00:13:45]

MV: Well I think it is quite urgent. We've been pushing for this for some time and I think one of the sort of side effects of the Siemens Alstom decision is that there's been a much stronger push for Europe sort of to see itself more confident in a world where we should see sort of the world around us not always just as partners but also as strategic competitors.

SA: Let's look at the upcoming European elections due in late May. You've recently thrown your hat into the race to becoming the president of the European Commission, the next president of the European Commission. What makes you the best candidate?

MV: Well actually this is not exactly what I've done. I have teamed up with colleagues in our political family. It's a social liberal, liberal family, and we're trying to, to promote the debate about where we're going to to to go with Europe. Because we don't just need another president, another face of the European Commission. We also need change in the way we work, in how we set our priorities. I think for instance that fighting climate change is a given. This is not something that you can choose not to do but you can choose how you do it and how you can do it in an inclusive way so that people don't scare off and think Oh my God I want to fight climate change but I also need to provide for my family, how to do both at one time. And that debate I hope will inspire people to vote. Because half of Europeans - it's not, it's not that they decide not to vote, they just don't even consider it. So we need to have a debate on substance, about what's important for us to inspire people to take part in the election.

SA: So explain to us a little bit to the process because usually one party selects one person that's their lead candidate in the election. Now with Alde putting forward this group of which you're you belong to, how is that going to work after the election?

MV: Well we have sort of two sources of legitimacy, the directly elected representatives in parliament and ministers and heads of state of governments in the European Council. And the two will have to decide together. Not one, not the other, but together. So after the elections groups will be formed in the European Parliament and they will have to be formed a majority who will be behind someone to head the Commission. At the same time the head of state of governments will discuss who would they wants to become head of the Commission. And there can be discussions and back and forth as to who will be the best person to fulfill this substantial mandate. And it can be someone who has been hitting a list. It can be someone from a party. It can be a head of state of government who makes himself or herself available in this process. So it it's a dynamic process where a number of things will come into consideration also because you will have a first vice president you will have the equivalent of our foreign minister. You'd have a head of the Council for for heads of state and government. So a number of different sort of things will have to be decided more or less at the same time.

SA: Well what should be the priorities of the next Commission? You've mentioned climate change a few minutes ago, but what other priorities should the next Commission have?

[00:17:30]

MV: Well I think it's important that people feel safe. And I think we, we feel that in in a different degree in different parts of the Union because some citizens are living in countries where you have a third country border. And I think it is important that we make sure that they feel as protected as if you are surrounded by other member states. Also when it comes to cybersecurity, because it's not necessarily just sort of old school security measures but also that we know that we are in control of our electricity grids, electricity for our hospitals, you know all of that that can be at risk with cybercrime and different kinds of cyber warfare. So of course that's very important. But the third thing of course to be that that we as citizens can see that our children will have a good chance of making it. As I experience it, even in countries where things seems to be fine, there is a worry: are the next generation going to have the same chances as I had? So I think we'll have to show that yes we can change Europe of course in very close cooperation with member states, because we will still be very different, but we can push forward so that we get more chances also for the next generation.

SA: When president Junker began his mandate he said that his team was "the last chance" Commission but with the luxleaks scandal, with Brexit, the migration crisis and several challenges to the rule of law in the European Union - has the EU missed its chance, Commissioner?

MV: Well, I think I think we have….-, when you look back, you will find others periods of time where our European democracy has been deeply challenged. And all these conflicts has also changed us. And for me it has made me appreciate how far we has come, because you're completely right in the problems that we face and the challenges that we have ahead of us. But Europe is still the place-, the best place to live in history, especially if you're a woman. That doesn't mean that everything is fine. There's still a lot to do and many people there in severe conditions and severe circumstance. But it just shows that when we have the confidence to work together, then we can also solve this full list of problems that we have to deal with.

SA: Let's look at one of the most discussed issues right now in the European Union. That is Brexit. Once you described this process as "if you bitch a little bit every day, you'll end up divorced". But this divorce is clearly, it's clearly struggling to materialise. What are the risks of prolonging this departure from the EU?

MV: Well I don't see a risk in prolonging the departure. Errr –, Of course then there would have to be European elections also in the U.K. because this is a right that we citizens have when your country is a member of the European Union. But, of course if-, if you need to reconsider how-, how the Brexit referendum should be respected, what would be the preferred UK choices, I don't see a risk in a prolongation, but of course you have to figure out; "well how would we want to use more time?" And then of course prepare for elections and hold elections and then figure out well what is it that we want to do? So no I don't see a specific risk in a prolongation. I think it's never a risk to think twice and to sleep on it then sometimes you wake up and you reconsider.

SA: This is definitely an unprecedented moment in European history. We have one country trying to leave for the first time. Where has the EU failed in this context over the last 60 years or so, in trying to keep a member in its club, essentially?

MV: Well I think we-, we spend a lot of time integrating member states in the European Union. But maybe we underestimated the importance of integrating the European Union in member states. Because, you have to feel at home in our European democracy. So it is important that the people who makes the connections: ministers in council taking decisions here, then traveling back home implementing it, that they feel that they own it. And sometimes I feel that-, that doesn't necessarily establishes itself. And then you get sort of the annoying things, you get the stories about the things that, "oh come on why-, why do they bother about this and that," but you don't get sort of, the passion that this is "ours." This is our democracy just as well as us the national democracy.

SA: You're one of the most powerful European politicians. You're also a mother of three daughters. What is your advice for a young woman trying to take on leadership roles?

MV: Well, one of the things that amazes me now that I'm 50 is that what I did when I was mid-20s. And I think one of the reasons why it could happen was that I didn't realize that I was too young. So I, I did it, as if I had learned more and seen more and was more experienced. And I think sometimes it is a good idea just to forget how other people see you and, and push forward and try to do things. Because very often the worst thing that can happen is that you, you feel ridiculed or you're hurt on your vanity, or you get a no. But, you will live and be wiser. And this I think for me this is one of the ways that I have gained in experience. So very often the worst thing that can happen is not very bad. So, keep trying. And of course I think be aware that you a woman because this is a great thing. You don't have to try to be a man to look for leadership positions or to be wanting to hold the tool of power to help other people.

SA: You've said before that it's time for a female, for a woman to be the next president of the European Commission. Do you think this is the breath of fresh air that the European Union needs to reconnect with its voters?

MV: Well I think it's part of it. I also think that the entire Commission should be gender balanced. I don't understand why people find that it is so strange that each country could come up with both a male and a female candidate so that you could make the best possible team on competence, experience and make it diverse. Because I think it's a very good thing when the people that work for us they also sort of reflect who we are. And Europe is a wonderful diverse continent. Also when it comes to gender. We are diverse in languages and cultural and national backgrounds. Why shouldn't we be gender wise? I think it's I think is an obvious way to show that we work for everyone.

SA: Commissioner, what's your recipe to striking the perfect balance between your work and your personal life?

[00:25:58]

MV: Oh I'd never try to achieve that. I never tried to achieve that because there's definitely no no no perfection. It's just that I've been asked so many times if I'm not a bad mother. And then I say that I may be but my children don't know any better. Because this is our life and we have, I, my husband and I, we have to take the responsibility for it. It's different from my mother's life but her life was also different from her mother's life. So I think the point is to try to feel at home, and, in what you do. And you know I have been so privileged all my life. I've had flexibility in my working hours. I have a keep striving to be present where I am. And then of course you can live your life in many many many different ways. Not perfect but maybe full.

SA: It's going to be your birthday in a few days time. What will be the perfect gift this year?

[00:27:05] Sunshine. Oh please please please it rain all March.

SA: I'm not sure you can have that in Brussels.

MV: Oh sometimes, yes.

SA: Okay. Anything else you'd like?

MV: We have organizing dinner with friends, and that I'm looking very much forward to.

SA: Very good. Thank you so much Commissioner.

MV: It was my pleasure. Thank you.

ENDS

For more information, contact Jonathan Millman: +44 (0)7788 307 996 / jonathan.millman@cnbc.com