Analysis: French backlash scuppers appointment of US economist for EU Big Tech regulation

CRA International

19/07/2023 15:47

By Foo Yun Chee
       BRUSSELS, July 19 (Reuters) - A French-led backlash led
to a U.S. economist withdrawing from a top European Union
antitrust job on Wednesday, a move some economists said risks
undermining competition policy-making.
    EU antitrust chief, Margrethe Vestager, triggered the furore
last week by picking Fiona Scott Morton as the chief economist
of the EU's antitrust unit, the competition arm currently
running probes into U.S. tech giants Alphabet  GOOGL.O , Apple
 AAPL.O , Meta Platforms  META.O , Microsoft  MSFT.O  and
Amazon's  AMZN.O  bid for iRobot  IRBT.O .
    It is rare for the Commission to pick a non-EU national for
such a senior job unless there are exceptional circumstances.
    France has in recent years been vocal about its
determination to drive Europe's independence and wants to remove
all possible U.S. influence from policy-making as it pushes for
strategic autonomy in key industries, such as technology.
    Scott Morton, 56, a Yale economics professor who held the
post of chief economist at the U.S. Department of Justice just
over a decade ago, has acted as a consultant for some Big Tech
companies including Apple, Amazon and Microsoft. She would have
had to recuse herself for up to two years from cases involving
companies which were her clients.
    France, from President Emmanuel Macron to its media and
lawmakers, led criticism of her appointment, but leaders of the
main political parties at the European Parliament also opposed
the move.
    A spokesman for the French foreign ministry said its
opposition "did not relate to the qualities of the person
concerned but to the compatibility of this appointment with two
principles which are at the heart of our conception of the
European Union: sovereignty and the protection of the interests
of European businesses and consumers."
    French politicians from all sides welcomed Morton's decision
on Wednesday.
    The EU has forged a reputation as a global pioneer for
formulating privacy rules to keep the U.S. tech giants in check,
handing out huge fines to Google for various anti-competitive
business practices and forcing Amazon to change the way it uses
sellers' data.
    Vestager said she accepted Scott Morton's decision to quit
with regret but economists warned that the debacle will leave
the bloc's competition commissioner weakened.
    Vestager should have been more transparent on possible
conflicts of interest, said EU lawmaker Paul Tang from the
Netherlands.
    "This transparency was needed to restore trust.
Unfortunately, Vestager did not intend to give that
transparency. That didn't help the candidature of Scott Morton,"
he said.
    Vestager's defence of her choice at a hearing on Tuesday was
disappointing, said EU lawmaker and French lawyer Stephanie
Yon-Courtin, who opposed Scott Morton's appointment.
    "Let's stop with criticism on nationalism. The issue with
this nomination was neither American nor French, it is a matter
of European interest," she said.
    Namur University law professor Alexandre De Streel, who with
Nobel economics Laureate Jean Tirole and Toulouse School of
Economics' Jacques Cremer, has published academic papers jointly
with Scott Morton and defended her appointment, said her
decision to quit was a big loss for EU competition policy.
    He faulted the Commission on its handling of the issue.
    "The Commission should have explained much better that
competition policy is engrained in business reality and
therefore, having worked for firms should be seen as an asset
and not a liability," he said.
    Thirty-nine top economists on both sides of the Atlantic
earlier this week rallied round Scott Morton with an open letter
pointing to her vast experience, commitment to public service
and call for a stronger regulation of large tech firms.
    

 (Reporting by Foo Yun Chee;Editing by Elaine Hardcastle)
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Messaging: foo.yunchee.thomsonreuters.com@reuters.net))