European Association of Judges, Copenhagen, 10 May 2019

"Check against delivery"

Introduction


Ladies and gentlemen


I’m very honoured that you’ve invited me to be here with you today, to take part in this meeting of the European Association of Judges. Because the work that you do, to defend the independence of judges, helps to protect the rights and the freedom of every person in Europe.

Most of us in the EU today are so used to that protection, that we almost take it for granted. But the rule of law isn’t something that’s always been there. It’s the result of a choice – to build, and to defend, a Europe that works for all its people, not just the powerful few.

That’s why it’s vital that we stand up for the rule of law in every country. Because defending the rule of law means defending the fundamental idea of Europe – as a society that treats every one of us fairly.

Many of you will know about the work which the Commission has been doing, to defend the rule of law. My colleague, Frans Timmermans, spoke about that subject at this meeting last year. So instead, I’d like to look at the rule of law from a slightly different angle – one’s that closely linked to my own work as Commissioner for Competition.

The thing is, the Commission doesn’t just defend the rule of law. We’re also an administration, which takes decisions that are governed by the rule of law, and controlled by the courts – like our decisions in competition cases. And the respect and commitment that we show to the rule of law in that role is a vital part of standing up for this essential principle.


Competition and the rule of law

It helps that the  competition rules are based on the same basic idea of what Europe should be, as the rule of law itself. They’ve been part of our Treaty since the day it was signed, more than sixty years ago, because they help to make sure our economy works fairly for everyone.

Competition puts consumers in control. It gives us the power to insist that the businesses we deal with keep working to find ways to meet our needs better – to cut prices, to improve choice, to come up with innovative products.

But you don’t get competitive markets without working for them. Powerful businesses will always be tempted to use their power to drive out competition. So our founders understood that, to keep the economy working well for everyone, you need strong competition rules.

But they also made sure that impartiality and the rule of law were deeply ingrained in the way the competition rules work. So we have the same rules for every business, no matter where they come from. We take decisions independently from political control, purely on the basis of the law and the evidence. And above all, the decisions we take can be appealed to the European courts.

At every stage in a competition investigation, we’re aware that our reasoning and our choices have to satisfy the courts. So for us, the rule of law isn’t just an abstraction. It’s a constant presence, in the work that we do.

And that’s a good thing -  because it helps us reach better decisions. It reminds us to make our assumptions explicit. It helps us make sure that we’ve considered every angle, looked at every argument that could prove – or disprove – our case.

And it also helps to build trust and acceptance for the work that we do. Of course, we can’t expect companies to welcome being fined. But it is important that our society – businesses, consumers, politicians – are confident that we’re taking those decisions for the right reasons.

And the proof of that is the fact that in everything we do, we are bound by the rule of law. Because that shows that our decisions are based, not on politics or prejudice, but on the evidence and the law.

 

The rule of law and the aims of public administration

The fact is, the rule of law helps us to do our job better. And it’s important that we’re willing to say that out loud. Because we’re living in a time when the rule of law is under attack. And part of that attack is based on the idea that it’s an obstacle that stops authorities from getting things done.

But we know that’s not true. We know the rule of law helps to build the public support that we need to do our work. And we know that it helps us take better decisions, and get the right results for the people we serve.

So administrations throughout the EU should acknowledge that. We should be willing to explain how the rule of law actually helps us to do our job better. We should show, in other words, that the rule of law is not just a prescription we write for others, but a medicine that we’re also glad to take.

 

The courts and the development of EU competition law

And that’s especially true for us, as a competition authority. Because it’s the work of both the Commission and the courts that has allowed the way we apply our competition rules to move with the times.

When the founders of our Union wrote the competition rules, they chose not to tie those rules to particular technologies. They didn’t try to specify every single action that a business might take, to undermine competition. Instead, they focused on setting out certain fundamental principles – principles that are just as relevant today as they were when the Treaty was signed, in 1957.

In that year,  the world’s first hard disk was installed. It weighed more than a ton, and it could store about five megabytes of data. Today’s smartphones allow us to carry a hundred thousand times as much data in the palm of our hands. And yet the competition rules that were written in 1957 still allow us to deal with the world of smartphones – as you can tell from the decisions we took last year, involving Google’s Android mobile operating system, and the smartphone chips made by Qualcomm.

That adaptability is one of the greatest strengths of the competition rules. But the real achievement in that time has been the way the Commission and the courts have worked together, each within their own area of responsibility, to make the most of that potential.

 

Competition rules in the age of digitisation

And today, that adaptability is being put to the test once more.  Digital technology is transforming almost everything we do. New ways of connecting people and vehicles and machines, of collecting and storing and making sense of data, are working their way into dozens of different markets. And that change will affect the way competition works, not just in one or two markets, but throughout our economy.

In the last few years, we’ve been working intensively to understand what these changes will mean for competition and consumers. We’ve learned over the years from the cases we’ve dealt with, involving companies like Google, Amazon and Microsoft. We’ve gathered information about competition in digitised industries, like the inquiry into e-commerce markets that we concluded two years ago.

In January, we brought together more than 500 people, for a conference in Brussels with leading experts on technology and society. Before that conference, we collected more than a hundred written contributions, from all sides of the debate.

And finally, a few weeks ago, we received the report which three special advisers – experts in technology, economics and law – have been preparing for us, for the past year. That report describes how digitisation could change our markets – and it puts forward some ideas, on how competition policy could adapt.

 

Power in digital markets

The first thing that’s clear is that digitisation can make markets work differently. And many of those changes go in one direction – towards giving dominant businesses even more power.

Economies of scale have always tended to give big business a head start. And that can be even more true in the digital world. Because the infrastructure you need to handle digital information can be expensive to produce – but once you have it, you can process millions of pieces of information almost as cheaply as you can with just a few.

Meanwhile, data is becoming more important for companies to compete, helping them cut costs, and serve their customers better, and training AI to take faster and better decisions than humans ever could  And that could give the biggest companies, with access to the most data, a competitive edge that smaller rivals can’t match.

And in many digitised markets, the value of a service depends not just on what that service can do, but also  on how many other people use it. So it can be hard for smaller companies to compete, even with a better product, if they don’t have the chance to reach a critical mass of users.

And one of the issues our special advisers are also concerned with is that digitisation could give powerful companies new ways to undermine competition. They’re worried, for instance, that dominant companies might try to make it harder for smaller, innovative rivals to break into the market by trying to stop consumers from using more than one competing platform – what’s known in the jargon as “multi-homing”.

 

Keeping competition analysis up to date in a digitised world

So to do our job properly, at a time when digital technology is changing the way markets work, we need to be willing to move with the times. We can’t limit ourselves to dealing with types of behaviour that we know from the past. Instead, we need to make sure our legal and economic tools are up to date, so we can tackle new kinds of behaviour that can harm competition.

It’s important, of course, that those tools are well designed, so we can reach an accurate conclusion about whether a company’s actions could harm competition. But – as the European courts have made clear – effective enforcement also means having tools that we can use in the real world, to take decisions in a reasonable time, with the resources we have.

And that’s especially true right now. Because digitisation is changing markets incredibly fast. The ground rules of this new world are being laid down as we speak. And unless competition authorities can move fast enough, to guide those developing markets in the right way, they could quickly get fossilised in ways that make it difficult for smaller businesses to compete.

 

Conclusion

And its important to avoid that happening. We’re now at a moment of truth, when we need to move swiftly. Because the decisions we take, in the months and years ahead, will decide whether the digital world works fairly for everyone.

So we have to keep up with the way our world is changing. Competition authorities, like the Commission, will have to develop new analyses, that allow us to deal with the new strategies that companies can use to undermine competition.

So these are challenging times for us all. But I’m confident that we can face up to those challenges. After all, for sixty years, the courts and the Commission have succeeded in keeping up with every change. Not in spite of our commitment to the rule of law – but because of it.


Thank you.