Antitrust star falls amid France’s renewed push for champions

Isabelle de Silva’s zeal may well have contributed to her dismissal when it clashed with French government priorities.

Antitrust star falls amid France’s renewed push for champions

PARIS — France’s chief antitrust enforcer Isabelle de Silva was a rising star known for tough action against U.S. tech giants. Yet this week she had to give her goodbye speech after President Emmanuel Macron ended her run.

The president’s decision to dismiss the powerful civil servant comes amid France’s renewed push for softer merger rules to pave the way for European champions — a line that de Silva had not always endorsed.

The Franco-American top official caught the world’s attention again in July when she hit Google with a €500 million fine over copyright payments to press publishers.

It was the sort of decision to set champagne corks popping in Paris — a vindication for the digital policy goals that France has been pressing for years.

Yet less than three months later, de Silva had to step down. In a decision that she said left her “surprised,” the competition chief’s five-year mandate was not renewed, and she had to hand over on Wednesday ongoing investigations into Apple and Google to an as yet unknown successor.

According to industry insiders who asked not to be named, among the reasons for her departure was her unwillingness to fall in line with Macron’s economic agenda — namely its embrace of corporate champions that, the theory goes, will help France and the European Union better compete against the United States and China on the world stage.

De Silva’s support of an EU decision to block a politically sensitive merger between France’s Alstom and Germany’s Siemens was a first strike against her. The second and third strikes may well have been her lack of enthusiasm about the acquisition of French broadcaster M6 by market leader TF1, which was backed by the Elysée presidential palace and which she — unlike other regulators — refused to endorse at face value.

In an interview with French news magazine L’Express this week, de Silva said that political support for that tie-up — which Paris hoped might create a broadcasting giant big enough to rival U.S. players — “doesn’t make [her] work any easier.”

Tough watchdog

That sort of outspokenness helped to build up de Silva’s profile over the past five years as she established herself as one of Europe’s boldest and most active enforcers.

This year, de Silva’s office fined Google twice — €220 million for abusing a dominant position in the online advertising market and €500 million for not respecting the authority’s orders to negotiate with the press industry for licenses.

In that regard, de Silva’s policies were in “close alignment” with France’s longstanding support of reining in tech giants, noted Nicolas Petit, a competition law professor at the European University Institute and former competition enforcer.

But there were other ways in which de Silva diverged from French priorities, in particular when the European Commission vetoed a mega-deal between Alstom and Siemens to form a “European rail champion.”

Her attitude didn’t perfectly fit with the government’s push to ease merger rules and pave the way for large industrial champions — a long-standing divergence between the competition community and political powers on merger control, which escalated in 2019 with Brussel’s veto.

While Paris and Germany launched a crusade to soften EU rules on mergers, de Silva backed the EU executive body’s decision.

Paris may well have forgiven that slight, but de Silva’s lack of upfront support for the TF1-M6 merger might have been a step too far for Macron and his allies, according to French media and industry insiders who spoke to POLITICO on condition of anonymity.

De Silva herself made no secret of her disappointment, speaking in interviews of her surprise immediately after the news of her departure became known. (Her predecessor, Bruno Lasserre, served two consecutive terms.)

“If she says that she’s surprised, it means that she is not happy at all,” said Tommaso Valletti, the European Commission’s former chief competition economist, now a professor at Imperial College London. “She expected to be re-confirmed as she has been very good and she has an excellent international reputation acknowledged by everyone.”

“It is very plausible” that her departure could be linked to her approach in the TF1/M6 investigation, he added. “Sadly, if you touch TV you die.”

Broadcasters vs. platforms

While de Silva will be going back to her previous job at France’s highest administrative court — the Council of State — her successor will be left to grapple with the politically thorny TF1-M6 merger, which will create a behemoth with 70 percent market share in the field of audiovisual advertising.

Its aim is to build a French rival to U.S. giants such as Netflix and Disney+, in line with priorities outlined by Macron himself during a speech presenting €30 billion of public investments on Tuesday.

If the merger is successful in France, it could set the path for more consolidation in Europe, as national TV broadcasters struggle to keep up with streaming platforms in the bloc.

Bouygues — the conglomerate which owns TF1 and telecom operator Bouygues Telecom — is set to buy stakes in the M6 group, partly owned by German media conglomerate Bertelsmann. The German company will still keep a 16 percent share in M6 to alleviate the potential concerns of the French competition authority.

The decision by the competition watchdog and the audiovisual regulator — the Conseil Supérieur de l’Audiovisuel, which already hinted it is in favor — are expected next year.

According to de Silva, the only way to see the deal approved would be to change the so-called “relevant market,” which is the benchmark used by watchdogs to assess competition cases. TF1 and M6 argue that the advertising market is broader than broadcast TV and should also encompass online ads, meaning Facebook and Google should be included.

However, there are fears on the competition authority’s side that considering a wide ad market that would include online and offline actors could jeopardize the regulator’s cases against Google and Facebook, which focuses their dominance on the online ads market.

De Silva’s successor will be appointed by the Elysée palace in the coming weeks. Several names, including that of former competition authority vice president Anne Perrot, are starting to circulate.

But the new president might be expected to keep a low profile. “At this stage, I don’t know if it is [de Silva] who was not renewed, or if it’s rather the model of a competition authority as a regulator that is sanctioned by a very Bonapartist president,” said a French regulation expert.

The Elysée declined to comment.

Elisa Braun contributed reporting.

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If the Commission won’t act on rule of law, the Parliament will

The news from Poland is a reminder of why we must use all the tools at our disposal.

If the Commission won’t act on rule of law, the Parliament will

Adrián Vázquez Lázara is chair of the Committee on Legal Affairs. Sergey Lagodinsky is vice chair of the Committee on Legal Affairs and its standing rapporteur for contentious matters of the European Parliament.

Our European Union was built step by step. No architect came up with a master plan. Instead, this unprecedented project evolved gradually over time, adapting to challenges but always pursuing its initial goal: preserving peace and stability in Europe.

We must admit, despite setbacks and imperfections, it has been a successful endeavor. Member countries have collectively mitigated a number of political and economic crises with a successful mix of determination and compromises. The results were not always perfect, but they were always acceptable to everyone. 

Today’s crisis is of a different kind.

It is a crisis of both European democracy and European effectiveness, and it has two consequences that must give us pause: First, foundational treaty obligations — the duty to uphold democracy, fundamental rights and rule of law — are being blatantly disregarded by some, at the expense of all. Second, and no less fundamental, the EU’s characteristic approach to settling disagreements through seeking compromise has proven itself at times powerless in the face of this alarming trend. 

Last week, Poland’s Constitutional Tribunal rejected the primacy of EU law over its national legislation, and this is not the only example. We seem doomed to watch governments of member countries —once regarded models of democratization — sliding down the drain of authoritarianism and corruption. 

This trend is self-destructive for the respective governments and, unfortunately, for the EU as a whole. The EU needs its member nations and the member nations need their union. 

Brexit has demonstrated how populist propaganda and anti-European sentiment can lead to economic crisis. That’s why even as the governments of Poland and Hungary reject basic European values, the citizens of those countries remain committed to the EU and its core principles. After all, belonging to the EU implies not just freedom but also economic and social opportunities, as well as the necessary joint power to succeed in a globalized world.

Indeed, for the citizens of countries at risk of sliding into authoritarianism, the EU is more than a market; they count on it to protect their rights. And so, we need to act. 

The toolbox we have at our disposal is large but also largely ineffective: From regular reporting over the lengthy infringement procedures to the Article 7 procedures deadlocked in the Council — none of the instruments has shown enough teeth to ensure respect for the rule of law.

But there is hope, and it lies with the European Commission. The Commission has been designed to play the role of “guardian of the treaties,” and if it takes this role seriously, it can deliver. 

This is what we, in the European Parliament, expect and demand.

Last year, negotiations on the Union’s seven-year budget presented a window of opportunity for the protection of core European values. In a lengthy process, the EU finally adopted the rule of law conditionality mechanism, a brand-new tool linking respect for the rule of law to EU funds. This legislation has been in force since January 1, 2021, but regretfully, the Commission has made no use of it. 

The Commission has taken some steps in the right direction. It has requested the imposition of financial penalties on Poland for its misguided judicial reforms, and it has put the Polish and Hungarian recovery plans on hold. However, in the face of a challenge of such magnitude, these measures are not enough. Now is the time to put into action what might be the last hope for the many pro-European citizens of Hungary and Poland.

So far, the Commission has refused to apply this conditionality mechanism. But the European Parliament, as the most passionate supporter of the conditionality principle, will not ignore its own responsibility. 

If the Commission is not willing to act, we stand ready to take it to the Court of Justice for its failure. Even before the ruling in Poland, our Committee on Legal Affairs was and still is working on defining the grounds for this future legal action and is about to issue a recommendation to the President of the European Parliament, David Sassoli.

The time for action is now. The European Parliament must take the lead and use all available means to ensure that the EU remains a bloc of fully democratic countries. Only then shall we be able to save the democratic soul of the EU.

Source : Politico EU More   

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