Vestager Vows to Review How EU Weighs Mega Deals

(Bloomberg) -- Margrethe Vestager, the European Union’s competition and technology czar, will review how EU antitrust regulators weigh industries, following criticism that they’ve been too rigid in fining Google and blocking mobile-phone, steel and rail deals.

Vestager’s move to forestall critics is to update guidelines dating back more than two decades on how enforcers define markets that companies operate in, she said in a speech in Brussels on Monday. She said the changes will tackle how digital firms have emerged “causing an earthquake in our markets” and how European customers are more willing to look for suppliers outside their home country.

“The challenges we’re facing, at the start of this new decade, mean that we need to look again at the tools we use to enforce the competition rules,” she said. Regulators try to study how companies compete and how customers and suppliers interact with them, ultimately asking if customers can find an alternative “if prices go up, quality down or innovation stops,” she said.

The EU has torpedoed many deals in recent years, halting consolidation among European telecommunications operators, stopping ThyssenKrupp AG’s steel merger with Tata Steel Ltd. and blocking a bid by Siemens AG and Alstom SA to combine their rail operations. Companies often argue that the EU won’t look at how they may face rivalry in Europe from imports or powerful companies that operate outside of the region.

Chinese Imports

Vestager explained how she knocked down the Tata-ThyssenKrupp deal, saying Chinese steel imports “didn’t have the quality and reliability they’d have needed, to be a genuine alternative to steel made in Europe.

She also confronted criticism that Google’s Android mobile phone software may compete with Apple’s iOS, in an investigation that led to a record 4.3 billion euro ($4.8 billion) fine last year. Since Android was distributed for free, it wasn’t possible to analyze pricing for the software, she said. Regulators instead weighed whether reducing the quality of Android would tempt customers to move.

“We found that this wouldn’t make customers switch to Apple,” she said, citing the costs of buying a new phone, downloading new apps and transferring data. “Because of this, we concluded that Google’s dominant position for licensing Android to smartphone makers wasn’t affected by the existence of Apple’s iOS.”

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Peter Chapman, John Martens

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