Bpifrance Inno Génération, Paris, 12 October 2017
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Ladies and gentlemen
In my office, I keep a plaster model of a hand, with its middle finger raised in a gesture that's not very polite. It was a gift to me when I was minister of economy in the Danish government from some people in a trade union. They weren't too pleased with the decisions we took to put Denmark's finances back on track.
I keep it because it reminds me of something important. When you do things differently, when you transform the way things work, you can't expect to make everyone happy.
Innovators know that very well. For every disruptive innovation, there's a business that gets disrupted. For every new idea that makes people's lives better, there's a company whose profits depend on keeping things exactly the way they are.
So innovation is not just about good ideas. It's about winning the argument in favour of change. And in Europe, our competition rules help to create the space to make that argument.
As the European Commissioner for Competition, it’s my job to make sure companies which dominate the market don't misuse their power to stop others competing. That they don't shut down innovation before new ideas have the chance to show customers what they can do.
That's why, earlier this year, we fined Google nearly two and a half billion euros. Not because it dominates the market for Internet searches. But because it used the power of its search engine to stop others competing and innovating.
We’re living at a time when technology is transforming our world. Intelligent algorithms, working with huge amounts of data, are changing every part of the way we live. And I think we’ve reached a point where the limits to what we can do are not technological. They're about whether technology undermines people's basic expectations from society. For freedom, for privacy, for protection and support.
Right now, less than a quarter of Europeans trust online businesses to protect their personal information. If that doesn't change, we won't get the most out of the power of data, to make us healthier, happier and greener. So technology companies need to win back people's trust. To show that they incorporate privacy by design, not as an afterthought.
And we also need to make sure digital businesses pay their fair share of tax. Because our societies are built on the principle that everyone makes a fair contribution to the services that make a decent society – health services and education, infrastructure and the welfare systems that protect us when things go wrong.
Last week, we decided that Luxembourg had to claim back around 250 million euros in unpaid taxes from Amazon. Amazon allocated the bulk of its operating profits in Europe to a Luxembourg company that paid no tax at all in that country. And yet that made no economic sense, because the company was a shell – with no employees, no office, and above all, no activities that could justify that allocation.
Special treatment like that, which benefits some companies and not others, is against our state aid rules. But it's only one part of a much bigger picture. And the state aid rules alone can’t solve all the issues we face. Because the fact is, our tax systems just aren't designed to make sure that digital companies pay their share of tax.
So we need to change the tax rules, not just in Europe but all around the world, so that technology companies make a fair contribution. Our hope is to agree a new international approach by spring 2018.
As public authorities, we know innovation matters. But we also know that we can't predict or control it.
What we can do is give innovators the room to succeed. We can clear the path of obstacles. We can make sure innovation doesn't undermine the basic expectations people have of society.
And then we can leave it to you to do what you do best – to do things differently, and transform our world.