Entrevista con Arianna Podestà, portavoz de la Comisión Europea para la competencia (en inglés)

Hoy os traemos una entrevista muy especial, que llevo persiguiendo desde el año pasado.

Se trata de una charla con la (nada menos) portavoz de la Comisión Europea para lo competencia. Dicho de otra forma, los que ponen las multas.

Como sabéis, Apple está bajo la lupa de la Comisión por sus presuntas prácticas anticompetitivas y una de las opciones que se barajan es obligar a Apple a permitir que se puedan comprar y descargar aplicaciones para sus dispositivos desde tiendas de terceros.

Así que pensé que sería muy interesante conocer cómo funciona esta comisión, como planifican el trabajo y cual es el proceso que se sigue para investigar si existen malas prácticas por parte de alguna empresa.

Para vuestra información, incluyo un gráfico con las áreas que abarcan y los logros conseguidos.

Por supuesto, una vez establecido el marco, nos centramos en los temas de Apple, como la App Store, los libros, etc.

Según nos comunicó Arianna en un correo posterior, Apple respondió con sus alegaciones a las objeciones de la Comision sobre la App Store en Septiembre de 2021. Según la propia Arianna, como hacen habitualmente, la Comisión está estudiando detenidamente la respuesta que Apple ha dado.

Por si os ayuda, pego aquí debajo la transcripción de la entrevista.

 

Pido perdón por adelantado por mi inglés de acento ibérico.. al menos ella me entendió. Espero que vosotros me disculpéis.

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Alf

Hi Arianna, you are both the European Commission’s Spokeperson for competition and for Eurostat. But I don't think Eurostat makes many news at all, does it?

 

Arianna Podesta  

No, Eurostat produces really a lot of statistics, clearly, and a lot of information. But usually, the information that comes from us feeds into the press releases of my colleagues following specific thematic areas in the Spokesperson’s Service of the Commission. 

 

So usually, if you want to have information on employment, that will be the employment spokesperson that deals with that topic, or you have, I don't know, information on hotel occupancy, then it's the spokesperson that deals with tourism and internal market that will usually use those figures in her communication. 

 

So for me, it's really the questions that relate to your stats, working choices how the about statistics are calculated, etc. But indeed, I mean, the vast majority of what I do is competition related. Yes.

 

Alf  

So, as we've spoken on the emails, the main idea is to get a glance of how the Competition Commission works, and how an investigation starts. And then, in the end, I would like to go a bit in detail about the tech competition investigations, specifically about Apple on the App Store and the payments and so on. 

 

Arianna Podesta  

Yeah, of course. I mean, I'm very happy to try to answer all of your questions. I hope I have all the all the answers. And indeed, if there's anything I cannot do not know or I cannot say, I will just tell you that I cannot say but I will always try to provide you as much context or process information as I can.

 

Alf  

Okay, because it's not very often that you do these kind of interviews. Is that right? am I the lucky one?

 

Arianna Podesta  

One, Yyou're one of the few lucky ones. Meaning that we are quite restricted in terms of what we can say, especially on ongoing cases. 

 

I think it's understandable because the matters we deal with are so market sensitive. 

 

Of course, what we what we do affects companies. So I talked to a lot of your colleagues, but usually, it's majority of time on background, which means we have a very informal testexchange. 

 

I, you know, explain the context, but you won't quote or you won't use it directly in your articles. Is more to give the context and there, it's a bit easier to pass, you know, messages and to say where we stand oin things.

 

I have limits, clearly, as far as interviews go. Because whenever we have an important case, or an important decision, or an important piece of legislation, usually we have the Eexecutive Vvice pPresident [Margrethe Vestager] coming to the pressroom herself. 

 

So generally, she answers the questions there and we'll media get the feedback they need. And of course, she also gives several interviews not maybe on one specific topic, but where she will answer with state of play [on policy or on cases]. So generally, the on the record information is given by her and less by me.

 

Alf  

I understand. As I said, there are so many topics that we would like to discuss about what are you doing to foster competitive environments in the European Union,  the EU. But for today, I would like to focus on the tech related ones. But first, let's learn a bit how the Commission works. 

 

Just as a general question, how many people do work in the commission?

 

Arianna Podesta  

So let's start with the first one. In general, the commission is a very big institution, if you look at the number of people working for it. 

 

I believe that it's about 32,000 people working for the Commission. Of course, this includes policy officers, researchers, lawyers, translators, etc. 

 

It looks very big, 32,000 people. But on the other hand, if you think that we, you know, follow 27 Member States, then actually, this number is, relative to the work we carry out, to all the legislative proposals we mtake, and of course, also to the competition decisions we take., and tThe DG competition Directorates, which is the competition specific one, hasit's about 900 to 1,000 people working in it.

 

Alf  

And I suppose there are people from all over the countries, the different countries that you cover, I believe.

 

Arianna Podesta  

Yes, indeed. You're absolutely right. 

 

So first of all, one of the core principles of the Treaty [on the Functioning of the European Union] is not to discriminate on the basis of nationality. 

 

So on the one hand, you need to ensure that there i's no discrimination in terms of the country you come from. 

 

On the other hand, it' is also important for the Ccommission to have a balance between the different nationalities not to have countries, you know, over -represented or under-represented. 

 

So it's always a mix, but you will have officials from the 27 Mmember Sstates working in the various policy areas.

 

Alf  

And is everyone working on the headquarters? Or do you have different offices in different countries?

 

Arianna Podesta  

So, the majority of colleagues will be here in Brussels, the vast majority. 

 

However, there are colleagues in the various Mmember Sstates that to work in the representations of the Ccommission to the various Mmember Sstates; we alsowill have colleagues in delegations. 

 

So, the EU has delegations in third countries, outside our Uunion. And we also have a number of agencies that are part of our framework, and these agencies are located in various Mmember Sstates. 

 

So again, not all here, but the vast majority in Brussels, I would say,

 

Alf  

And in Competition, how many people do work.

 

Arianna Podesta  

As I was mentioning, it should be around 900 to 1,000 people working in DG competition directly., Tthen, of course, that i's the core but also when you work in DG competition, you will work with a number of other colleagues and in other services, for example, the legal service that ensures the legal certainty soundness in the decisions we take and we cooperate a lot with them. And translators as an examples. So of course, it i's it's a collective effort, also for our [comeptition] cases as well.

 

Alf  

And when an issue appears, how is it distribute the work? How do you distribute the work? I mean, you as you said, you need legal, and you need insurance and you need whatever... borders... , how do the teams are assigned to a specific task?

 

Arianna Podesta  

You mean only relating to competition, I imagine?

 

So we can look into into a moment into how cases come up, but let's say we have a competition case. 

 

Usually it will be assigned to a team working in DG competition. The DG , that competition has a clear structure. 

 

So, there's case teams working on different topics, in different units, according to the different instruments. 

 

So Tto give you an example, we will have merger units dealing with the mergers in the field of transports, then you will have Sstate aid units dealing with they didn'tcases in the field of transport. 

 

And the same for antitrust matters. And the same goes for other topics, such as. 

 

I don't know financial services, media, what else services of general economic interest, etc. 

 

So you will have this variety and there's going to be a case team assigned, which will really look into the matter. 

 

However, even if one service - and in this case, it i's DG competition - is responsible for a specific policy area, the decisions taken by the Commission are Ccollegeial decisions. 

 

So they involve all the Ccollege which is composed of 27 Ccommissioners., Tand they need to go through a process of approval by the other relevant Directorates, or Ccommissioned departments if you want. 

 

I was mentioning, for example, the legal service but of course, there's many, many others. And this process is called interservice consultation. 

 

So before a decision is adopted by the Ccollege, all services will be consulted and involved.

 

Alf  

Just to make sure that I get it right. When you say DG competition, do you mean digital competition?

 

Arianna Podesta  

No. DG means Directorate General. Sorry, the Directorate General, for competition, is the [Commission’s] department for competition. We call it DG Ccompetition. 

 

If you were asking about the digital competitiondepartment, we call it DG Connect. We have names for all the various departments basically.

 

Alf  

And how is the competition commission structure? I mean, I believe this, the head is the Commissioner, which is Margaret Vestager. And how it spreads down?

 

Arianna Podesta  

So you will have Eexecutive vvice ppresident with is Vestager, who' Is the ccommissioner responsible for competition. She i's a part of the members of the Ccollege, who isare appointed with a mandate of five years. 

 

And they work together with President [Ursula] von der Leyen. 

 

And, of course, she has a structure behind it, which will be her cabinet. 

 

And then you have the service, which is the Director General for competition, as we were saying., and tThere you will have a structure of officials that work together with the Director General Olivier Guersent. 

 

Below him, you will have three Deputy Director Ggenerals for the different instruments -, so one for antitrust, one for mergers, one for Sstate aids. 

 

And below them, you will have an entire structure of Directorates, and case units that reports to Olivier and to Commissioner Vestager.

 

Alf  

All the way to the 1000 people

 

Arianna Podesta  

All the way to the 1000 people. 

 

Alf  

Now getting into matters. How does the competition committee start an investigation? Does it do you need to have someone to present a request or you can start things autonomously?

 

Arianna Podesta  

We have three types of instruments in the competition world. 

 

One is sState aid. And of course, it has its own procedures. 

A second one is mergers. So we look at transactions like mergers and acquisitions. 

And the third one, which is the one I think you're most interested in, it's antitrust and cartels. 

 

In this instrument, cases can have a number of different origins. 

So we can have complaints. A competitor usually will come to us and will signal that he believes that there is an issue in a given market, possibly caused by a specific behavior of a specific company, and it will provide us with evidence to support the claim. We will assess this service information as evidence and we will, you know, decide whether to really open an investigation or, or or not. 

 

And this is one way in which we can start looking into something.

 

A second way is the whistleblower tool. So it's this is someone who, let's say more informally, contacts us., Oof course, this whistleblower can request anonymity, it's very, very frequent with whistleblowers cases, signaling that there may be an issue in his or her opinion, his or her opinion, in a given market and there we can decide again to give it a closer look or not. 

 

A third way we can decide on our own initiative to look into into a market because we ourselves supported suspect there might be something that is not perfectly working in a given market. And we want to take a closer look. 

 

And another way is a leniency application from a participant to a cartel. So for cartel cases - cartels is where two or more companies collude to get a gain, and usually, you know, to at the expenses of competitors, suppliers, clients, etc. And it is illegal to have these types of arrangements. 

 

One of the participants to the cartel can decide to come to us and apply for leniency. So basically self-denouncing himself and the cartel saying to the Ccommission: I have participated to this cartel and I provide you with information. 

 

The first one who applies for leniency gets the benefit of not having to pay a fine. So the leniency tool is a very useful one to detect cartels, of course.

 

Alf  

Ahá. And when someone complains, do they have to bring some proof of what they are saying, or the just the complain is enough to start an investigation?

 

Arianna Podesta  

Well, I mean, it i's in the interest of the complainant to provide us with as much information as possible for us to look into a case. 

 

When a complaint comes to us, they usually want us to investigate a given market and the more evidence they give us, the easier they make our job and the more likely it is that we will actually have a case leadif indeed, there is an issue. 

 

So yes, generally, complainants substantiate their claims with some degree of evidence. Of course, if we don't consider it sufficient, we can, you know, either ask the complainant for more information, if he has it. Or we can also decide: yes, this merits a closer look. And we can ask the market for more information.

 

Alf  

And once you start an investigation, is it done by your own people? Or do sometimes you require external investigators or lawyers or whatever is needed to conduct the investigation?

 

Arianna Podesta  

Well, usually it's us that carry out the investigations. We have a number of rights that are derived from Treaty on the Functioning of the European Union. 

 

In particular, if you want to be very precise, articles one and 101 and 102 of the Ttreaty. 

 

And they giave us the right, as I was saying, to request companies for information, but also - in the context of an inspection -, to enter the premises of a company, to examine records, to talk with managers, etc, etc. 

 

So we have all these powers. And it's us that usually carry out all these processes. 

 

For example, we have also an IT forensic unit who are specialists in IT forensics, as, of course, the world is becoming more and more digital. So it's a unit thatof clearly plays a role in some of our investigations. 

 

They We cooperate sometimes with different authorities to get as much information as possible, for example, prosecutors, police, etc, or those who monitor tenders, to name a few. 

 

Who we cooperate with that is usually the national competition authorities, because, you know, we are the European Commission, and then you have national competition authorities in the Mmember Sstates. 

 

And we cooperate with them, for example, in the context of an investigation or in the context of a case. 

 

And this is regulated through the European Competition network, which is a forum where we ensure that there's an efficient use of resources. 

 

And there is really a flow of information between the authorities, where needed. Sso we will inform each other about the cases that we a're carrying out. 

 

And we will eventually talk about the decisions we will be taking both from our side and the side of the Mmember Sstates.

 

Alf  

And the fines are, how do I say it, established? The fines in proportion of whatever it's being investigated? Or it's something that is decided on a case by case system.

 

Arianna Podesta  

The fines have a maximum. The fines we impose, being the Commission, have a maximum level which is 10% of the annual global turnover of a company. 

 

So this to say is really the maximum possible. However, they will be commensurated to the specific case and conduct. 

 

Alf  

Of the global turnover, not European turnover, but global.

 

Arianna Podesta  

10% of the annual growth global turnover that a company generates,. hHowever, they will be proportionate. 

 

So we will evaluate case by case, depending on how serious the breach is, you know, on the duration of the infringement as well and a number of other factors., Aas I was saying, leniency -, if the company has applied for leniency be it for first or for second, etcetera. 

 

If the company has cooperated, we will give a reduction as well, because, you know, if we start going to a company and the company decides, this is (I'm talking about cartels specifically) that it will cooperate and provide us evidence, it saves our time as well, so we will reduce the fine.

 

In antitrust investigations that are not cartel related, let's say that, at the end of an investigation, there's three possible outcomes. 

 

First type of outcome is that we have really looked into it a. And in the end, we decide that there's no issue. It's a possibility, of course. 

 

Second situation is that the company says, Yes, I see why you believe that there has been an anticompetitive behaviorbehaviour a. And I offer commitments., Sso the companies will offer us commitments to solve our competition concerns. 

 

And there, we will make these commitments binding on the company to make sure that this behavior does not happen again. 

 

And third case is [a] fine. So there again, we can decide to impose a fine on the company up to the 10% threshold, that I was mentioning. Perhaps I can give you some of the highest fines. Just to give you an idea of the total antitrust fines that we gave, could that be of interest for you?

 

Alf  

Yeah, I've seen a graphic that you shared on Twitter. And I see that in 2021, total fines were by 1.7 billion.

 

Arianna Podesta  

Yes, that was 2021. If we look at the 10, or well, I won't tell you the 10 biggest cases, but looking at the biggest cases in terms of fines, the biggest one was the Google Android case from 2018, where the fine was 4.3 billion. 

 

Just to give you a proportion., and tThat's the biggest we had, and then that you know,it proportionately reduces, as I was saying., Iit really depends also on the turnover of the company. 

 

And we have the Google search case, which is the shopping one, we have the Google AdSense on advertising, we have Intel, Qualcomm, and then going down to the others. 

 

Alf  

And how do companies pay? Do they make a wire transfer, or they put a check? How these works?

 

Arianna Podesta  

So first of all, whenever we take a decision, companies have a right to appeal. This is very important. 

 

Of course, they can always go to the EU courts, and appeal all of our decisions if they don't agree with the outcomes. 

 

Generally, if it's a commitment decision, they have offered commitments, so hopefully, they will not appeal. 

 

But if it's a finingal decision, that's a possibility, they have a right to do so. 

 

In the EU, we have two courts. So the first level is thea Ggeneral Ccourts. And after that decision is taken [by the General Court], either the company or us can appeal this first decision to the European Court of Justice. 

 

And that's the second level. 

 

wWhile this process is carried out, so we know if there's an appeal ongoing, the companies fined can either make a provisional payment in an account or they can give us financial guarantees. 

 

So we need to make sure that the fines are covered. 

 

Once the decision is final, meaning that there's no more appeal possibility,  either because they haven't appealed from the start or because we have carried out the entire process, then the money flows into the budget of the Ccommission, reducing the contributions from Mmember Sstates. 

 

So, Mmember Sstates have to give a certain amount of money to the Union per year to the commission and these fines that we collect proportionately reduced the contribution of all Mmember Sstates.

 

Alf  

Okay, so that answers the gossip question about where do money go, once it gets into [the EU account]. So the states have to pay less? If yes, if you have a lot of activity and you find a lot of companies...

 

Arianna Podesta  

Yes, meaning it i's to the benefit of the citizens in the end, of course, because the money that Mmembers States did give, you know, comes also from taxes, when. At the end is ait is the  taxing contribution by citizens that is reduced to citizens. 

 

And it compensates the harm that has been suffered in the market because of the distortion of competition created by the company abusing, for example, its dominant position or, you know, entering into agreements that it shouldn't have entered into. 

 

That's the idea, but of course, before we take decisions, we are very sure from a legal perspective, and we take decisions that are very much needed for the level playing field in the market. 

 

And clearly, we have the Ccourts overseeing all of our decisions and activities. So there's a nice balance there.

 

Alf  

Before we move into another topic, is there something that we should know about how the Commission works, how the competitive department works?

 

Arianna Podesta  

In particular,  I find it that having worked there, I find it is a very motivating service, because you really have a sense of how much you're doing to protect the European market and the companies that operate in the European market, and the citizens that are part of our markets. 

 

So you really feel the effects of what you do. And you have a lot of motivation and on why you do it. So I think it's very rewarding to work in this department.,

 

Alf  

You are working for the better good for everyone, here. 

 

Now, we move into the Apple case that it's been going on for quite a long time now. 

 

In the document, it said that the investigation was started because of a complain by Spotify, and from an unknown ebook seller, which I found it curious, because usually it's always on the app or games or even music market. 

 

But it doesn't seem like the book market is something that Apple is relevant, as of now. It's not a very big platform compared with the competition like Amazon or some others, right? Or even Google?

 

Arianna Podesta  

Well, it's two different cases, first of all.

 

So one is the case on music streaming, as you were rightly mentioning, and that was brought forward by a complaint by Spotify. 

 

And there, it's an investigation we have opened in June 2020. 

 

And tThere we are more advanced, meaning that last year, on 30th of April, we have actually sent to Apple a sStatement of Oobjections. 

 

A Sstatement of Oobjections is a document which that is sent to companies in the context of an ongoing investigation, basically giving our preliminary view on what aspects we believe the company has distorted competition on. 

 

So on the Spotify complaint, we have, you know, really advanced in the investigation., Bbecause we believe there is an issue in the App Store.

 

And here, in particular, on the way Apple's music streaming [works]. 

 

So Apple Music competes with other companies, such as Spotify, and - if you want - we can go in more detail there. 

 

And then indeed, you are right. In June 2020, we have opened a second investigation in the eBook market. Tthere we have received a complaint from another competitor. 

 

Here competitors can decide to remain anonymous, it's a right they have, but it needs to be justified. 

 

For example, Iif you fear (just in general, not in relation to the specific case), but they could feel that there could be retaliation from the company youthey're complaining about. 

 

So if they have reasons to want to maintain the anonymous status, they can do. 

 

And this is why we can say Spotify complaint on one, while and on the other one, we can just say that it was an ebook provider and. Tthere what we are were looking at is I mean, it's quite similar but in different markets. 

 

We're really looking into the way the App Store works. So we are taking issues with the in-app purchase system, how it works., Yyou know, that Apple charges 30% commission's on all subscription fees through this in- app purchase system. 

 

And second issue we're looking into is the restrictions on alternative purchase possibilities. 

 

So Apple does not let these competing apps publicize on the app the possibility of buying the services elsewhere, for example, from their website. And these are the two aspects that we are looking into.

 

Alfonso Tejedor  

Yes, if I recall correctly from the emails we've been exchanging the past months, you were expecting Apple's answer by the end of last year to that document that you sent them in April? Has Apple answered it yet?

 

Arianna Podesta  

I would need to check for that. I have to say the truth is I haven't heard the latest. So there would have to check and I'm happy to get back to you on that.

 

Alfonso Tejedor  

But Apple has a period of time to answer, right?

 

Arianna Podesta  

Yes, I mean, the fact that we send a Sstatement of Oobjections gives Apple the possibility to reply to our observations, to say why it, perhaps, doesn't agree with the competition concerns that we have raised., Iit also gives Appleoes access to the file, so it gives Apple the possibility to really see the evidence collected and the basis for the concerns. 

 

And it also gives Apple the possibility of being heard. So there i's, you know, there' is a hearing organized with the company involved in which they can make their case and explain to us. It's really a dialog phase. Now I would have to check on whether we have received a reply or not. 

 

And then, basically, what happens is, again, we will assess the information, we will eventually revert to the market, etc. And this leads at a certain point to a final decision by the Commission., Aas I was saying before, three types of outcomes are possible. 

 

Perhaps important to note is that in antitrust investigations, we don't have deadlines. So we can really take the time we need to build a strong case, in one way direction or the other, before we adopt the decision.

 

Alfonso Tejedor  

I have, and I believe many people have, a hard time to understand that in the real world, whenever we enter in a big warehouse or any kind of store, we don't see a product having an advertising saying "buy these in another place, which is cheaper". 

 

And I believe the App Store, it's Apple's App Store. So we don't understand why they should allow to advertise on the apps that are sold on the App Store that they can it can be bought or upgraded, or whatever, cheaper in another place. That is something that doesn't happen in the real world.

 

Arianna Podesta  

Well, first of all, let me let me just explain a general concept perhaps that can be of interest:, we don't have an issue with, you know, a company being big, or a company being successful., Tthis is absolutely fine. 

 

What is important for us and is that this size, or power, is not abused, to the detriment of the market and of consumers, ultimately.

 

In the case of Apple, iPhone and iPad users are very loyal to Apple. 

 

And when they start using their systems, they tend to continue using all of their products that are linked to the system. So there's a high degree of realization risk of clients being locked-in.