EU's Vestager says breaking up companies is last option

By Foo Yun Chee

BRUSSELS (Reuters) – Europe’s antitrust chief Margrethe Vestager said on Tuesday she preferred to use fines or other penalties on rule-busting companies rather than break them up, saying this approach would be less disruptive to the companies and the market.

Vestager is staying on in her job as European Competition Commissioner for another five years and now enjoys additional regulatory power to target the technology industry as part of a broader role ensuring Europe is fit for the digital age.

Calls from critics and politicians to break up tech giants accused of abusing their position to squash competitors have intensified in recent months, especially in the United States.

Vestager, a former Danish economics minister, has gained a reputation as a tough enforcer, notably with a record fine totaling more than 8 billion euros ($8.8 billion) on Alphabet unit Google (O:) for throttling rivals.

Asked if she would consider breaking up companies that violate rules, Vestager told her confirmation hearing at the European Parliament that it was not her favored option.

“Breaking up companies, well, this is a tool that we have available, it can be done. The thing is I have obligation to use the least intrusive tool in order to restore fair competition,” she told lawmakers in a packed chamber.

“Since it is quite a thing to break up a company, obviously I have an obligation to try what else can be a good tool to solve the situation that we are in,” she said.

Vestager has in the past years handed out hefty fines as well as ordered companies to change their business practices.

She is expected to order U.S. chipmaker Broadcom (O:) to suspend some business practices until she completes her investigation into potential anti-competitive business practices, according to a source.

At the hearing, she said such interim measures had benefits.

“We find it a high priority to speed up what we do,” she said.

An interim measure against Broadcom expected in the coming weeks would be the European Commission’s first in almost two decades. It bans certain activities until the regulator completes its years-long investigations and could pave the way for similar action against other tech companies.

Vestager also dismissed concerns of conflicts between her enforcer and new regulatory role, saying Commission decisions were taken jointly by commissioners and reinforced by independent advice from the EU executive’s lawyers and economists.

The Commission as a whole requires EU lawmakers’ approval before taking office in November.

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