TED Talk, New York, 20 September 2017
*Please check against delivery*
Let's go back to March 1957. Representatives from six European countries have come to Rome to sign the Treaty that will create the European Union.
Europe was destroyed. A world war had emerged from Europe and the human suffering was unbelievable and unprecedented. Now, those men wanted to build a peaceful, democratic Europe. A Europe that works for its people. And one of the many building blocks in the peace project was a common European market.
Already back then they saw how markets, when they’re left to themselves, can end up as the private property of big companies and cartels. Meeting the needs of some businesses, instead of consumers.
So from our very first day, in 1957, the EU has had rules that defend fair competition - competition on the merits: On prices, quality, innovation. And my job, as the European Commissioner for Competition, is to make sure that companies that do business in Europe live by those rules.
Why we need competition rules
But why have competition rules at all? Why not just leave it to business to compete? Isn't it in their interests to compete as freely as possible - and in our interest, since more competition means more innovation, better products and services, and lower prices.
Mostly, it is. The problem is that sometimes, for business, competition can be inconvenient.
Because competition means that the race is never over, the game is never won. It means that, no matter how successful you’ve been in the past, there's always someone coming up, trying to take your place.
So the temptation to avoid competition is powerful. It's rooted in motives that are as old as Adam and Eve. In greed for yet more money. In fear of losing your position in the market, and all the benefits that position brings. And when greed and fear are linked to power, they create a dangerous mix.
We see that in political life. In parts of the world, that mix of greed and fear means that those who get power never give it up freely. One of the many things I like and admire in our democracies are the norms that make sure our leaders hand over power when the voters tell them to.
Competition rules can do a similar job in markets – making sure that greed and fear don't overcome fairness. Because those rules mean that companies can't misuse their power to undermine competition.
Competition rules in action
Think for a moment about your car. It has thousands of parts – from the foam used in the seats to the lights and electrics. And for many parts, the world's carmakers depend on just a few suppliers.
So it’s hardly surprising that those suppliers might be tempted to get together and agree to fix the prices of those parts. But just imagine what that could do to the price you pay for a new car.
Except it's not imaginary. In the last few years, the European Commission has dealt with seven different car part cartels – and we’re still investigating others. The US Department of Justice is also looking into the market for car parts - and it has called this the biggest criminal investigation it has ever pursued. But without competition rules, there would have been no such investigation and nothing to stop that collusion from happening.
It is not only companies that can undermine fair competition. Governments do it too, when they hand out subsidies - financed by taxpayers - to a few favoured business. Like the special tax treatment that companies like Fiat, Starbucks and Apple got from some governments in Europe.
Those subsidies stop other companies competing on equal terms. They can mean that the companies that succeed are the ones that get the most subsidies or are the best connected. And not – as they should be – the ones that serve consumers best.
Fairness and competition
So there are times when we need to step in, to make sure competition works the way it should.
By doing that, we help to make markets work fairly. Because competition gives consumers the power to demand a fair deal. It means companies know that if they don't offer a good price, and a proper service – well, then their customers will simply go somewhere else.
And that sort of fairness is more important than we often realise.
Because most of us don't think about politics all the time. But we do have to deal with the market every single day. We don't want businesses to agree on prices in the back office or divide the market between them or one powerful business to keep their competitors out of the market. If it happens we feel cheated, ignored, taken for granted by the market. And that undermines our trust in the society around us.
In a recent survey, more than two thirds of Europeans said they felt the effect of a lack of competition. They paid too much for electricity, or the medicines they needed. They had no real choice when they wanted to travel by train or by plane. They got a poor service from their Internet provider. In short, they found that the market didn't treat them fairly.
Those might seem like small things. But they can give people a sense that the world isn't fair. They see that the market – which is supposed to serve everyone – becomes more like the private property of a few powerful companies.
The market is not the society. Our societies are much more than the market - but lack of trust in the market can rub off on the society as such - so we lose trust in our society.
And that is the most important currency our societies have – trust.
We can only trust each other if we’re treated as equals. If we all have the same chances, all have to follow the same fundamental rules. Of course, some people and some businesses will be more successful than others. But we don't trust a society if the prizes are handed out before the contest begins.
Trust and our digital future
That's where competition rules come in. Because they make sure that markets work fairly, that businesses compete on the merits. And that helps to build the trust we need as citizens to feel comfortable and in control - and that our society needs to work well.
Without trust, everything we do becomes harder.
We can't live our lives today without trusting in strangers. In the banks that keep our money. The builders who build our home, and the electrician who comes to fix the wiring. In the doctors who treat us when we’re ill, and the other drivers on the road.
As our societies grow, trust gets more important than ever – and harder to achieve. Especially when new technologies change the way we interact.
Those technologies can help us to trust each other, with things like ratings and other systems that have made the sharing economy work. But technology also creates totally new challenges, when it invites us to trust not other people, but computers and algorithms.
Those technologies have enormous potential to do us a lot of good. Autonomous cars could give people with disabilities a new chance of independence. They could save time for us all and make much better use of resources. Algorithms that rely on crunching big data could help doctors prescribe treatments designed just for us. And much, much more.
But no one’s going to agree to hand over their medical data, or step into a car that's driven by an algorithm, unless they trust the companies they’re dealing with.
And that trust isn't always there. Today, for example, less than a quarter of Europeans trust online businesses to protect their personal information.
But what if people knew they could rely on technology companies to treat them fairly?
What if they knew those companies respond to competition by trying to serve consumers better. Not by using their power to shut out competitors – by, say, pushing competitors' services far down the list of search results.
What if they knew that compliance with the rules was built into algorithms by design? That those algorithms had to be designed in a way that mean they couldn't form a cartel, for instance?
Together with regulation, competition rules can do that. They can help to make sure that new technologies treat people fairly and that everyone can compete on a level playing field. And that can help us build the trust we need so real innovation can flourish.
Because trust can't be imposed. It has to be earned.
Since the first days of the EU, sixty years ago, our competition rules have helped to build that trust.
A lot has changed in that time. It's hard to imagine what our founders would have made of a smartphone. But in today's world, as in theirs, competition makes the market work for everyone.
That's why I'm convinced that real and fair competition has a vital role to play, in building the trust we need to make the best of our societies. And starts with enforcing our competition rules.