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After the Scott Morton storm, the fight is on against Big Tech

As it swept through Brussels like a hot summer storm, the Fiona Scott Morton affair had all the ingredients of the significant but short-lived political commotion.

President Emmanuel Macron is Brussels’ favourite ‘Marmite’ character: either loved or loathed. When he voiced his opposition to an American nominated as the European Commission’s chief competition economist, much of the expert commentariat jumped on it as yet another narrow-minded French political swipe at the US.

A veteran MEP went as far as qualifying it as “nationalist crap”.

Even the esteemed Economist columnist Charlemagne emerged from his northern summer retreat to draw some big geopolitical conclusions: “A spat in Brussels pits an open vision of Europe against an insular one”, his column was titled.

Five simple reasons Scott Morton didn’t fit

As the dust settled, however, the Scott Morton appointment appeared all wrong for five much simpler reasons.

First, she was chosen by means of some curious twists to EU Commission procedures, undermining trust in the appointment process. In principle the job is reserved for EU nationals, but the job advertisement made an exception, suggesting she perhaps was handpicked before the process even started.

Second, her credentials for the job were not as clean-cut as initially thought. Her background from the Obama-administration, touted by some as a major positive, perhaps wasn’t exactly that. Few US administrations have pressured the EU as much as it did not to act on Big Tech privacy and competition concerns and societal harms.

Third, as an academic, Scott Morton has outstanding competition policy qualifications. But she also wrote papers and op-eds arguing against antitrust break-ups, while failing to disclose she was being paid by Big Tech.

At Yale, these undisclosed conflicts of interest were considered unethical by members of her own research team, and some resigned in protest.

Fourth, on a purely practical note, having recently been a paid adviser of Apple, Microsoft and Amazon, she would be of little use in critical aspects of the EU job. Conflict of interest standards would limit her ability to work on the implementation of the EU’s flagship regulation effort, the Digital Markets Act, and on major tech merger and antitrust cases.

Fifth, and finally, European Commission executive vice-president Margrethe Vestager, widely seen as instrumental in the choice of Scott Morton, put up a rather unconvincing defence for the appointment in the subsequent European Parliament hearing. French newspaper Le Monde even went as far as labelling it a “half-truth defence”.

Europe’s lost tech regulation decade

All this is water under the bridge now, but for Vestager, c’est une triste sortie. For almost a decade she has held, as the commission’s competition czarina, the strongest of EU powers. Yet repeatedly something seems to have come in the way of the right decisions or timing.

While Europe’s industry was being despoiled by the WTO-breaching US Inflation Reduction Act — and the world’s open trading system appeared fast unravelling — she came out of a fruitless EU-US Trade and Technology Council last December boasting she had “a great meeting”.

In the Digital Service’s Act debates, when the European Parliament was battling the invasive tracking ads at the heart of Big Tech’s surveillance capitalist model, she came to the tech industry’s rescue.

Whether unwittingly or willingly, the look was bad: only months later, the US Department of Justice launched a major investigation” into Google’s digital advertising abuses, pulling no punches.

Vestager is far from the only one to blame, but the story of the past 10 years remains that tech regulation has mostly come in quantities too little, too late, or simply been unsuccessful. Antitrust and competition controls have not averted the forming of monopoly positions and anti-competitive behaviour across the tech industry.

Years of discussions on codes of conduct on extreme, divisive or false content have not prevented grave harms to our information space and democratic fabric.

The EU’s GDPR has not meaningfully protected the privacy of personal data nor prevented the consolidation of surveillance capitalist hegemons. And when the commission has attempted bold action such as on Ireland’s deplorable tax benefits to Apple, the European General Court found it too hazardous and struck it down.

The end of laissez faire?

The tide is now turning, however, one of Europe’s top competition enforcers assured me when we had lunch recently — and not only with the arrival of the EU’s Digital Markets Act. On both sides of the Atlantic there is a willingness to do more and differently.

Under the Biden Administration, a transformed Department of Justice and Federal Trade Commission, with chairwoman Lina Khan at its helm, have adopted an activist agenda on tech monopolies, consumer protection and AI. President Biden himself has taken to writing strongly worded op-eds calling on “Republicans and Democrats [to] unite against Big Tech abuses” and now they are.

In fact, for some years now, the US laissez faire orthodoxy has been crumbling under the assault of a new generation of academics like Khan. The ‘consumer welfare standard’ doctrine Scott Morton has been a proponent of, is no longer the cutting edge.

Even the influential Chicago school, which famously argued for as little state intervention in the markets as possible, has changed its tune on monopolies and Big Tech.

This groundswell should now embolden Europe.

Despite treaty competences to do so, the EU has never dared under the watchful eyes of Washington, to break up Big Tech, for instance by forcing the separation of activities that are in direct competition with businesses dependent on their networks.

That may change now. Although it’s too late for her own mandate, Vestager recently spoke of the need for structural separations in a press conference on Google’s ad-tech abuses.

Unbundling the platforms should be high on the next commission’s agenda.

Big Tech knows it and is therefore preparing its fightback on both sides of the Atlantic. The public should have no illusions: everywhere there is a public agenda against it, the secret hand of the tech industry will attempt to undermine legitimate interests. In Washington, a 20 percent budget cut on antitrust regulation appeared recently in the US Senate’s Appropriations Bill.

At this crossroads, the choice of the regulators therefore matters more than ever. The Scott Morton affair was the passing squall of this summer. The real question is who Vestager’s successor will be.

Source: euobserver