Margrethe Vestager: ‘We are doing this because people are angry’

Margrethe Vestager: ‘We are doing this because people are angry’

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In the unhinged 18 months since the EU referendum was called, I’ve listened to and made many arguments about the folly and hubris of Brexit, but I’ve never encountered any argument quite as compelling as the simple presence of Margrethe Vestager. I met Vestager (pronounced Vest-ayer) in her office on the 10th floor of the curvy cross-shaped Berlaymont building in Brussels, home of the European Commission. The office is light and bright, with a desk facing a window, which spans the length of the room. There are modernist paintings on the wall beside a wooden stepladder (“If a woman wants to go places she should bring her own ladder”, she likes to say) and, on a low table, a white cast of a human hand with an upraised middle finger – an ironic gift from a Danish trade union. For the last two and a half years, this has been one of the few offices in the world in which billionaires fear to tread.

As European commissioner for competition, Vestager regulates commercial activity across the EU and, with her team of 900 investigators she has, since she arrived in the post in 2014, apparently been conducting an experiment in what a new world order – or at least a freer and fairer globalised market – might look like. The daughter of two Lutheran pastors from the flat and marshy Danish coast of Jutland, she tries to work with a simple liberal philosophy in mind: “Politics should give all people opportunities and enable them to make free choices.”

The full extent of this belief started to become clear in January 2016. Tim Cook, the CEO of Apple, arrived in this office to discuss his company’s European tax arrangements, which had long been claimed to operate through a shell organisation in rural Ireland. By some accounts, Cook made the mistake of trying to intimidate Vestager during this meeting. He interrupted her questioning to offer a brief, intemperate lecture on the appropriate attitude of governments to corporate taxation, an outline of the kinds of deals that had allowed Apple to operate so effectively in Europe and elsewhere in the past.

Vestager, who is both cheerfully engaged and resolutely unflappable, listened to these arguments, continued her investigations and then, in late summer of last year, came up with her own considered verdict on Cook’s idea of corporation tax. “Apple’s tax benefits in Ireland are illegal,” she said. Vestager laid out her belief that the corporation’s secretive deal with the Irish government amounted to state aid – the company paid tax at something like 0.005% – and that it therefore contravened European law. Apple, she said, owed the people of Ireland back taxes totalling a jaw-dropping €13bn (£11bn) plus interest. She served notice that the EU would be enforcing that payment through the courts. Cook called the judgment “total political crap”. Apple immediately vowed an appeal.

That salvo against Apple was only Vestager beginning to count the ways in which global corporations might finally be held to account by European democracies. She has also driven investigations of Fiat, Gazprom and Starbucks. The “Luxleaks” revelations, a cache of documents relating to corporate tax affairs in Luxembourg now in the public domain, allowed close scrutiny of the tax arrangements of McDonald’s and Amazon for the first time – remember all those lines on your bank statements reading “payment to Amazon EU Sarl”? – and Vestager’s rulings are imminent. Her team are also pursuing a case against Qualcomm (for selling computer chips below market price allegedly to drive competitors out of business) and in May, fined Facebook €110m (£94m) over the data mining of Whatsapp accounts, which contravened its takeover terms. There are also three separate antitrust cases against Google, which accuse it of using a mixture of algorithms and dominance to destroy competition. The first of these, which insists Google skewed its search results to favour its own online shopping services, led to a €2.4bn (£2.14bn) fine levied in June (against which Google is appealing). The others, including what Vestager calls the “real heavyweight one”, which alleges that the Android platform has built-in monopolies, are pending.

Vestager is not technophobic or anti-Silicon Valley – she is a long-term Apple user, and her face lights up when she remembers the first time she did a Google search – and neither is she anti-business. Far from it. She just wants a market and a tax system that plays by the stated rules and pays its way.

“It is our suspicion that Google has been using Android to make sure it is dominant when we go fully mobile in search,” she says. “They do some amazing, innovative things, but they are really an old-school advertising business. The way their products are set up, you have to take their browser and their search engine. People then don’t go looking for anything else, so competitors never have a chance of showing us something else. And because the market doesn’t work, then nobody invests in innovation…”

Protestors outside the Irish parliament in Dublin



Protesters support the European commission’s decision to demand €13bn in back taxes from Apple outside the Irish parliament in Dublin. Photograph: Paul Faith/AFP/Getty Images

Can you imagine Theresa May, too chicken to address the European parliament or, God help us, Liam Fox, having the wit or the gumption to hold Google or Apple or Facebook to account in these ways? While our government is sending secret billets doux to Nissan to keep them sweet in Sunderland, or begging letters to the CEOs of FTSE 100 companies in the hopes of getting them to say something, anything, nice about Brexit, Vestager has been quietly asserting her understanding that the political battles of the present and the future should not be among nations, but between democracies and globalised corporations, which for too long have had things their own way. Those battles can’t be fought by individual countries, because global companies just base themselves elsewhere. But if a market the size of the European Union starts to assert its collective interest, then the corporations might have to take notice, act fairly and pay tax. In that sense, Vestager is perhaps all of your Brexit regrets made flesh.

She wears that mantle lightly. A tall, smiling woman of 49, she talks with unusual warmth and candour for a politician who is clearly relishing the role of enforcer. She takes me first through the detail of her office and the scope and limits of its power. Her 900 staff are divided among the three strands of her department: merger control, state aid and antitrust; there are also experts in different sectors – cars, pharmaceuticals, hi-tech, food and so on. Language and digital skills are obviously at a premium.

One of her directives – she only has a five-year term, though it can be extended by the Danish government – is to try to speed processes up as much as possible. There is a danger that companies will stall their way to avoidance, waiting for the new occupant of her desk. One result of that has been a sometimes overwhelming workload for the department. “When we do merger rulings, we have strict deadlines: 25 days,” says Vestager. “It is extremely intensive, and you must decide how you can do it, before your spouse says, ‘You know I still love you, but please spend some more time at home.’”

Vestager married Thomas Jensen, a teacher of philosophy and maths, in 1994, and they have three daughters aged 14, 18 and 21. Her efforts to juggle political intrigue and family made her a model for the lead character in Borgen, the Danish political TV drama. While Vestager was Social Liberal party leader and the finance minister in the coalition Danish government, Sidse Babett Knudsen, who played Birgitte Nyborg in the series, followed her around for a day or two watching her at work. In Borgen, Nyborg became Denmark’s first female prime minister. In real life, that honour fell to Helle Thorning-Schmidt, with whom Vestager’s party formed a coalition (the negotiation to determine Vestager’s own role – minister of the economy and the interior and deputy prime minister – took a stubborn three weeks, before being resolved over pizza with Thorning-Schmidt at her home). Vestager doesn’t think much of her own character made it into Borgen, but the desperate attempts to find any kind of work-life balance ring true.

Sidse Babett Knudsen, star of Borgen, who shadowed Margrethe Vestager for inspiration.



Sidse Babett Knudsen, star of Borgen, who shadowed Margrethe Vestager for inspiration. Photograph: Aller Media AS/Rex

“I am here in Brussels with one of my daughters,” she says of her current arrangement. “My eldest has now left home. And my husband is back in Denmark with our younger daughter. It is not ideal. But when you live this way, you realise that there are a great many families that don’t all sit around the dinner table every night. But obviously, we would like to be together.”

Vestager grew up in a family that did sit around the table. She was raised not so much with politics (though her great-grandfather was a founder of the party she went on to lead) but with a sense of strong community engagement – perhaps the same thing. After her parents’ Sunday church services, the congregation of 200 would often end up in their garden for the afternoon. “My parents didn’t do office hours, and they did not do vacations so if you had a problem you could always come around. I watched them and thought: ‘OK, this is what you are supposed to do.’ I was very engaged in my local primary school, and when I went to secondary school, and to university. And one thing led to another, and here I am.”

She shares her parents’ Christian faith, though she says she has had a “troublesome” relationship with the church. “If I had a motto, it would be ‘believe in God, fear the church’,” she says. “History shows the power-grab in every religion once it gets organised. And then it’s people making you do things that you don’t agree with and setting the rules. But it does mean something to me to believe that we are not alone – the human animal is quite a scary thing, left on its own. And I like that [faith] gives me something to strive for, because I think if we have something to strive for, the better side of us comes to the front.”

Would she say she came to this job with a sense of moral crusade, to turn a few tables over?

“Not moral,” she says. “That word is difficult. But I do think the world can be a better place.”

She believes – against the finer judgment of the Daily Mail – that the EU has been and can be a powerful agent in that process. “Choices were made when this organisation was created in the early 1950s,” she says. “And they were real choices about how things should work – because they had very recent evidence of how things could go badly wrong. If you go to the US, they did not make those choices and you see that things work very differently there.”

Her first experience of Europe was as chair of the finance group in 2012, when Denmark had presidency of the council. She was surprised by the atmosphere. “I had colleagues from all these different countries, different languages, and yet it was possible to make decisions,” she says. “Both to pass legislation, but also to discuss – how do you make this work in your country? How do we do it? Which is better? I found that both very useful and very inspirational.”

When she was nominated by Thorning-Schmidt as commissioner – which, perhaps conveniently for the prime minister, removed her from day-to-day Danish politics – Europe, she says, was still in a major crisis. Austerity, unemployment, Greece, and the emergence of rightwing groups: “Europe-bashing was basically the thing.”

She believes that mood has changed radically since then with the Dutch elections, Macron, and above all “the really sobering effect of Brexit and the new administration in the US”. No one, she suggests, is making the mistake of saying the problems are over. But “there is a real atmosphere now of saying: we have a chance, Europe has a chance really to reconnect and serve our citizens.”

Her department feels at the centre of that, but she insists she is not alone. She points to the speed at which Europe has created a coast and border patrol and is moving toward a digital ID system “so we know exactly who is coming and going in Europe”. She points to the spirit her Swedish colleague Cecilia Malmström is promoting in trade negotiations. “She has basically retired the concept of free trade and introduced an idea of relationships. The model of the new Canadian agreement is not about tariffs but about reciprocity: ‘If you do this, you can sell it to us, and we will commit to the same standards.’” In that way, she suggests, “we can use trade agreements to address working conditions, animal rights issues, environmental issues across the world. Cecilia’s phone is ringing all the time.  [Deals with] Japan and Mexico are under way, Australia and New Zealand…”

In this sense, Vestager believes, Brexit has had a positive and galvanising effect on the rest of Europe. It has provided that Joni Mitchell sense of not knowing what you’ve got till it’s gone. Vestager spoke with Michel Barnier earlier in the week, she says, and despairs a little at the lack of progress. But she believes the referendum result gave the remaining 27 a new sense of purpose.

“We would rather have been without it, of course. It is so sad. Unbelievably sad. But now we know we cannot change that, I think the other member states feel that they have really been given something as well. People feel more strongly about Europe because of it, and it has made member states say, ‘We want discussions with you [about how things can be done better], but above all we want this to work.’”

Margrethe Vestager at a June press conference on the European commission’s Google Shopping antitrust case.



Margrethe Vestager at a June press conference on the European commission’s Google Shopping antitrust case. Photograph: Emmanuel Dunand/AFP/Getty Images

In passing, she mentions one of the lasting gifts of the UK to the EU: the English language. The fact that most business is done at the commission in a second tongue is an unexpected blessing, she suggests. It forces people to really try to say what they mean. There is no space for rhetorical flourish. Of course, we Brits overlook that effort.

“When I came here,” Vestager says, “the first three months, nothing at all was left in me at the end of the day. It was so challenging to work all day in another language. I spoke to Lord Hill, your former commissioner, who is a great friend: ‘Aren’t you devastated by listening to how we ruin your language all day?’”

She laughs. “Lord Hill is very dry. ‘No, no,’ he said, ‘I am just honoured that you are all trying.’”

But doesn’t the greater harmony she identifies also lead toward the Eurosceptics’ greatest fear: federalism, a one-size-fits-all Europe? One way of reading her sanction against Apple is that it is a step toward tax harmonisation across the member states (and that in future, the sanction should more logically be directed against the Irish government that offered the dubious tax deal than against the corporation that accepted it). Is that the case?

“I am not a federalist,” she says. “We are doing this because people are angry about tax avoidance and the [European] council knew that it already had the power to do something to change that. The thinking was: ‘Let’s try to do something different within the system we have. Something that means no change to legislation or voting systems, but a change in attitude that acknowledges that people across Europe are angry.’”

Strangely perhaps, to British ears, she sees the new EU as a model of can-do efficiency. “When I came here, I had been a legislator for more than 20 years,” she says, “in a Danish system where very often you have minority governments and you work so hard just to get a majority in parliament to support anything. A lot of energy is directed to that. Here, it is not so hard to get a majority; you see the little green lights lighting up in parliament. But the energy has to go into implementing things. Into making it work. I am so happy to be allowed to be the enforcer. I am not a lawyer. I never try to be a better lawyer than the lawyers, but I have a sense of what is possible.”

I suggest this is a journalistic sense, really, a nose for knowing where the story lies.

“In Europe you can’t tell people the detail of what you do,” she says. “You have to tell them the bigger story.”

In this case, it seems Vestager is on to a winning plotline. Not everyone is interested in politics, but everyone lives in a marketplace: for food, for electronics, for whatever. For a long time that marketplace has seemed out of kilter, to be the engine of vast inequality and of the cynicism and anger that accompanies it. Vestager acknowledges that after the financial crash, little was done to repair a system that had proved so damaging, and too much effort was put into restoring the status quo. If European government is seen to apply its rules fairly to Google and Fiat and Starbucks and the rest, though, it can send a powerful message. How does she define that message?

“That the market is not the society,” she says, simply. “For a long time we have been told that is all it is. But the market is there to serve us as citizens. If the market becomes everything, you have this feeling that you are being cheated all the time, and that you are not in control. I think we have the power to change that.”

In the eurosceptic imagination there is a place called Brussels that issues diktats about straight bananas and European armies. In reality, there are 28 European Union member states, soon to be 27, with a smorgasbord of political traditions and priorities.

The breadth of EU membership explains why the depth of integration is always contested. In theory, 27 countries (excluding Britain) agree on the priorities for the next decade: stronger eurozone institutions to protect the single currency, joined-up action on migration and defence, a free-trading continent that is not “naive” about foreign competition.
The difficulty is they do not agree how to get there. Take the eurozone: France and Germany agree on further integration, including a eurozone finance minister and European monetary fund, but disagree on how much risk should be shared. Or migration: every EU member state wants more “solidarity”. Solidarity for Italy and Greece means other countries taking in more refugees. Solidarity for Hungary means tougher action to protect the EU’s external borders.

For most countries, tax and military spending are closely tied up to national sovereignty, so there is reluctance to cede too much control to EU processes. Europe has always been about compromise. But compromises can be harder to find in a bigger club.

One small aspect of that change, she suggests, with half a smile, is the slightly improved gender balance on the commission, which now includes nine women in key positions. There is plenty more to be done, but she hopes it is going in the right direction.

“It’s funny – my daughter, the one who is here, says: ‘I thought your generation had fixed this, that it wouldn’t still be a problem.’ I tell her I have to leave something for her generation to do.”

In her meetings with corporate leaders, Vestager is still quite often the only woman in the room, though she thinks the men are probably more aware of that than she is.

“If there are just two women in a group, it doesn’t change, but if you really alter the look of a group, you alter the tone of a group,” she says. “I don’t believe in male and female stereotypes, but I have often seen that the more diverse a group is, the better the decisions that are made.”

She learned some of that from her mother, who alongside her ministry stood a few times, unsuccessfully, to be their local MP. She smiles. “Where we grew up, there were not many of us Social Liberals, so it was safe to stand – you had no chance of being elected. It was the same when I took over her candidacy in the late 80s. But in Denmark, the tradition is you take a beer crate and you stand on it and start speaking. And see what happens.”

Vestager says she was quite shy as a teenager, so that initial stepping up to address a crowd in Jutland didn’t come easily. I wonder if she still has any sense of that trepidation when she conducts her more combative meetings, with the likes of Apple and Google?

“Sometimes people tell me if you are in a big meeting and want to build yourself up, then picture your opponent naked,” she says. “But that kind of scares me. I would rather think, ‘I come here as the voice of 500 million citizens.’ I believe they back what we do. That is quite empowering…”

As she describes this, I can’t help feeling that the fact that the 500 million is about to become 65 million fewer is more than a profound shame.

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