Rencontres de Bercy, Paris, 21 November 2017
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Ladies and gentlemen
I want to thank Bruno Le Maire very much, for bringing us together today.
This is a perfect time to launch this discussion. Because something is changing in the way we deal with digital technologies.
It's about a decade since we got the first iPhone, the first Kindle, the first tweet. And I think most of us remember the thrill of discovering those new possibilities. How exciting it was to take a picture on our phone. To strike up a conversation on social media.
But living with technology is a bit like a marriage. You may start off starry-eyed. But once you've been together a while, you come to see that there are flaws, as well as good qualities. And if the marriage is going to last, you need to find a way to live together in harmony.
I think that's where we are right now with digital technologies. It's not that our relationship with those technologies is failing. It's just that we’re thinking more clearly about the challenges, as well as the benefits.
People are asking whether our smartphones are distracting us from real life. Whether technology is quietly undermining our privacy. Whether even our democracy could be threatened, when political debate moves from the public sphere to our social media timelines.
They are wondering, in short, how to make sure their technology serves society, not the other way round.
You see that in a series of debates that are going on right now. Like the discussion on making sure digital companies pay their fair share of tax.
Of course, our decisions on special tax treatment that Apple got from Ireland, and Amazon from Luxembourg, are only a part of a much bigger investigation, that goes well beyond technology. We’ve looked at more than 1000 tax rulings as part of that work. We’ve found that Fiat, Starbucks and a whole series of multinationals got illegal state aid from Luxembourg, the Netherlands and Belgium.
But as we’ve looked at whether companies pay their fair share of tax, it's become clear that our tax systems aren’t well designed for modern ways of doing business. Tax systems that are based on a company’s physical assets can't easily deal with digital companies. And in fact, domestic digital businesses pay less than half the effective tax rate of their offline equivalents.
It will take more than competition rules to fix that issue. It will take a reform of our tax systems, not just nationally, but internationally. We all know how much France has done, to put this question at the top of the agenda. And we have a responsibility to work together to find the right answer.
Last month, the Commission launched a public consultation on how to tax the digital economy. The results of that consultation will help us work with our partners in the OECD, to find solutions that will work all over the world. And if there’s no international answer to this issue by spring next year, we’ll produce our own proposal for new EU rules to make sure digital companies are taxed fairly.
Data and privacy
We also have to make sure those companies use our data responsibly. So we can be sure that they’ll respect our basic right to privacy.
New ways of collecting and working with data have huge potential to improve our lives. But that will only happen if people have confidence that their data will be safe. And right now, less than a quarter of Europeans trust online businesses to protect their personal information.
That's why we have new rules on data protection, which apply from next May. And competition enforcement can make a difference too. It can help to make sure we have diverse online markets, where companies compete not just to cut prices, but to protect our privacy better.
That data can help computer algorithms learn to make decisions – and eventually, to take over those decisions from humans.
We’ll have to think hard about what that means for the future of work. And as we come to rely on algorithms, to drive our cars or diagnose our illnesses, we’ll also have to make sure that they're worthy of our trust.
That means that compliance with the rules – the competition rules, for instance – should be built into those algorithms by design. So that even if we don't know exactly how they make their decisions, we can be confident that algorithms will act like good citizens.
Competition and innovation
Building that sort of trust is important. Because digital technology has a lot to offer us.
But to make the most of that potential, we need competition. Because competition is what drives companies to keep innovating, trying to stay a step ahead of their rivals.
That's why we fined Google nearly two and a half billion euros. Because it was using the power of its search engine, to stop rival comparison shopping services competing on the merits.
And it's why we agreed with Amazon that it would stop making e-book publishers promise to match any deal that they agreed with another retailer. Because that promise made it hard for other retailers to have to a chance to compete.
And by keeping these markets open, by defending competition, we’re helping to make sure innovation can thrive.
And here in Europe, that gives us a great opportunity. We are an innovative continent – ten of the top twenty countries in the Global Innovation Index are EU members. So we have the potential. And our job, as public authorities, should be to help those innovators to succeed.
That doesn't mean that public authorities should create our own European technology champions. That makes no sense, when we have no way of knowing what the next big thing will be. But we can make things easier for innovators. We can help them raise the money they need to grow. We can make sure the markets they operate in are fair and open to everyone.
Because open markets, where competition can flourish, help to build strong European companies that can compete with their rivals from across the world.
Of course, it's true that in some industries, size is an important part of being competitive. And we understand that some businesses want to merge with competitors, to give them the scale they need to compete. But that mustn't come at the expense of competition in Europe. Of the consumers and businesses who depend on those companies. Or the way competition drives our companies to produce better, more innovative products.
And there's no reason why it should. Our work on mergers shows that's it's almost always possible for companies to grow without harming competition in Europe. Because there’s usually a solution – such as selling off part of the business – that can make sure competition stays strong, so we can let the merger go ahead.
Because our job, as public authorities, isn't to hold back change. When it comes to the way our society lives with technology, we should be relationship counsellors, not divorce lawyers.
We need to make sure technology doesn't undermine people's basic expectations of society. Whether that means privacy, or democracy, or fair taxation.
So we need an open, democratic debate about what those expectations are, and how we can meet them. And these Rencontres de Bercy are an excellent way to get that discussion started.
So I want to thank Bruno Le Maire once again, for making this possible. And I wish you all a very fruitful – and innovative – discussion.