Competition poses the toughest test for climate chief Ribera

BRUSSELS — Convincing European Union lawmakers to back her as the bloc’s new climate and competition chief will be the easy part for Spain’s Teresa Ribera. 

If confirmed in her post, though, climate expert Ribera will quickly discover that the competition leg of her vast portfolio is a major head-scratcher, in a world where the EU is trying to boost its productivity and relevance in the face of an increasingly tense geopolitical scene. 

As the chief enforcer of state aid rules, Ribera will have the last word on how EU countries subsidize companies to ensure large, deep-pocketed nations don’t outspend their smaller neighbors.

At the same time, she’ll oversee the Clean Industrial Deal, a major legislative initiative to seed the climate-friendly sectors of the future while helping existing companies cut carbon emissions and compete.

Competition is a weak spot for the Spanish socialist, whose entire career has revolved around energy and environmental issues. It is also the policy area the EU is betting on to help unleash economic growth and subsidize the right investments.

“It’s not clear to us how she’ll do it. There is a risk that there won’t be this independent watchdog, that the combination of competition with other policy issues jeopardizes the watchdog component of that role,” said an EU government official granted anonymity to speak freely. 

Vincent Hurkens of the E3G think tank said she faces a “very complex” task to enable government aid as the economy emerges from the shocks of the pandemic and the Ukraine war while dealing with concerns that some countries can outspend others.

“She has, on the one hand, to answer how she can guarantee that level playing field, but at the same time provide sufficient investment in a time where there doesn’t seem to be that much of an appetite to go for very ambitious new plans to secure additional public funding in the EU,” he said.

“So that’s really for her to provide a vision on — how will you square that circle,” he said. 

Damian Boeselager, a German Volt lawmaker, worries that the current European Commission emphasis on spending is wrong-headed. He said the EU should “start focusing on startups and scale-ups — and not [on] large state aid to large players in large EU member states such as Germany.”

Big Tech tensions

Donald Trump’s reelection as president of the United States has turned up the temperature for EU efforts to police (largely U.S.-based) Big Tech and multinational corporations’ megadeals.

Trump vowed last month not to let the EU “take advantage of our companies,” saying Apple CEO Tim Cook had called him to complain about an EU antitrust fine and back-tax order.

Apple may now be set to get the EU’s first fine for not complying with digital competition rules, Bloomberg reported. The European Commission has also raised the prospect of forcing Google to divest part of its advertising service as part of a probe likely to finish next year.

“The victory of Donald Trump is closely linked to the support of Elon Musk and other Tech tycoons who explicitly said they want to avoid any kind of regulation,” German Green lawmaker Alexandra Geese told POLITICO in an email. This puts pressure on the Commission “to stand tall by our rules,” she said.

It isn’t clear how Ribera will handle potential U.S. retaliation over decisions she might have to take to enforce EU rules against U.S. tech firms. Tech doesn’t seem to be a top priority for her, at least not the way it was for her predecessor, Margrethe Vestager. Geese and others previously highlighted how Ribera’s marching orders didn’t target how digital power has concentrated in the hands of a few companies, mostly from the U.S.

This marks a stark contrast from 10 years of high-powered antitrust enforcement by Vestager, who made Silicon Valley take notice of Brussels bureaucrats with hefty fines, back-tax bills and deal vetos.

“We are coming out of two mandates with Margrethe Vestager, who was really a driving force,” French Renew lawmaker Stéphanie Yon-Courtin told POLITICO. “And now I’m afraid it’s going to be an empty shell,” she said of the competition portfolio, pointing to the low prominence given so far to antitrust in what Ribera has been told to do and what she herself is committing to.

Policing deals and foreign government aid

Mergers feature prominently in the instructions Ribera got. She will be under pressure to reform how the EU checks and blocks deals, with Germany and France calling for rules to allow bigger airlines and telecom companies. Two high-level reports recently backed more telecom consolidation and scaled-up firms to make the European economy more efficient and resilient.

But changing merger rules is easier said than done. Allowing bigger national champions could come to the detriment of smaller companies and consumers.

“With a big push coming from telecom incumbents and major airlines to get bigger in European markets, can creating ‘European champions’ not end up in fact reducing innovation in the European market and therefore harming consumers?” asked Agustín Reyna of the consumer advocacy group BEUC.

A specific call to police “killer acquisitions,” where big companies snap up innovative potential rivals, could also lead to friction with U.S. tech or pharma companies, which have attracted most recent EU enforcement efforts. Ribera could end up having to defend against accusations that the EU is taking a harsher line with U.S. deals to protect its own industry.

Another legal weapon, the Foreign Subsidies Regulation, could also put her on a collision course with U.S. businesses. Although the tool was largely aimed at creating more checks for Chinese state subsidies, its broad scope has also netted many firms from friendly states.

“U.S. companies and financial investors are required to go through a complex process to notify acquisitions, and this could get drawn into transatlantic trade spats,” warned Philippe Radinger, a consultant at FGS Global. 

A crosscutting challenge for Ribera will be managing her time among so many priorities.

“I’m just wondering when she’s supposed to sleep. It’s not clear to me yet how she’ll do it,” said German Green lawmaker Jutta Paulus.

Aude van den Hove contributed reporting.