On with Kara Swisher - Margrethe Vestager Shows Tech Gatekeepers The Door

Episode Date: March 18, 2024

For the past decade, the European Commission has taken on Big Tech under the leadership of Executive Vice President Margrethe Vestager, inspiring fear and griping from tech CEOs the world over. Today, Vestager reveals why, despite being one of the toughest regulators in the business, she considers herself a tech optimist. She and Kara discuss the impact of EU antitrust lawsuits - including the most recent $2 billion fine against Apple - whether EU tech regulations passed to improve safety and competition (the Digital Markets Act and the Digital Services Act) could hamper innovation, and if guardrails created for the future (the AI Act) might come too late. Plus: what’s next for Vestager when her term ends this year? Questions? Comments? Email us at [e-mail] or find us on social media. We’re on Instagram/Threads as @karaswisher and @nayeemaraza Learn more about your ad choices. Visit podcastchoices.com/adchoices

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in the all-new reimagined Nissan Kicks. Learn more at www.nissanusa.com slash 2025 dash kicks. Available feature, Bose is a registered trademark of the Bose Corporation. It's on! Corporation. Hi, everyone. From New York Magazine and the Vox Media Podcast Network, this is On with Kara Swisher, and I'm Kara Swisher. My guest today is Margreta Vestager, Executive

Vice President of the European Commission for a Europe Fit for the Digital Age. That's a mouthful, but it's one of the world's most powerful antitrust watchdogs. I've known Margareta for nearly a decade. I interviewed her for Recode in 2019 and in 2021 on Sway for the New York Times. She's been the driving force behind three sets of regulations that are trying to make the tech industry fairer and safer for consumers in Europe today and in a future that will be determined by artificial intelligence. And she's thrown the equivalent of the kitchen sink at big tech, including a recent landmark $2 billion antitrust fine against Apple.

I would have to say singularly, she's the one regulator that Silicon Valley is terrified of. But it's also been slow going and her mandate is limited, not just geographically. Her term is about to expire. So I want to talk to her about all of these guardrails and their limits, how she views what's happening here in the U.S. and what the future could hold without her holding the reins. Our question this week comes from Congressman Ro Khanna of California's 17th District, also known as Silicon Valley. We'll hear from him and Vestager after the break. Fox Creative. This is advertiser content from Zelle.

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Published by Capital Client Group, Inc. Support for this show is brought to you by Nissan Kicks. It's never too late to try new things, and it's never too late to reinvent yourself. The all-new Reimagine Nissan Kicks is the city-sized crossover vehicle that's been completely revamped for urban adventure. From the design and styling to the

performance, all the way to features like the Bose Personal Plus sound system, you can get closer to everything you love about city life in the all-new, reimagined Nissan Kicks. Learn more at www.nissanusa.com slash 2025 dash kicks. Available feature, Bose is a registered trademark of the So, Margrethe, are you still in Austin? I'm still in Austin, yeah. I'm still in Austin. I've been following in your footsteps, becoming one of the entries of the Hall of Fame of the South by Southwest. Oh, congratulations. That's great. Thank you very much. I knew you would be the one to appreciate this, having been there yourself. the Hall of Fame of the South by Southwest. Oh, congratulations. That's great. Thank you very much.

I knew you would be the one to appreciate this, having been there yourself. Yes, indeed. They give you that special badge and everything. It weighs a ton. It's very nice. And, you know, all the other awards, it was, you know, sometimes I think that tech for good and tech that serves people is a fiction.

And there you just have one company after another, and they have these great ideas, and they put them into life, and they changed the world. It was amazing. So is there one that stuck out? Is there one that stuck out to you? Oh, one was really, really touching. It was a man who went blind at the age of eight in a shooting

in which he lost his father and his brother. And he had devoted his life to making gaming available to blind people. That is astonishing. And you had people who were enabling women to have safe abortions, no matter where they were in this nation, where this is such a conflictual issue. So, you know, you had people coming from all sides of tech, and they were doing things that were hands-on, useful, making a difference in people's lives. That's how I like technology. So, it's a lie that you don't like tech, correct? It's not the tech you have a problem with. I have no problem with tech whatsoever. You know, I could completely subscribe to your book.

What is the subtitle? A Tech Love Story? No, I really, really like technology. And I think that, for instance, if we're ever going to be successful in fighting climate change, it will be with the help of technology. If we're ever going to have equality in health, it will be with technology. If we're ever going to have equality in health, it will be with technology. So there are so many extremely necessary use cases. So, Margrethe, tech optimist.

Anyway, let's talk about what you've done so far. There's been a lot of news from your office in the past few weeks. The landmark $2 billion fine against Apple and, of course, the Digital Markets Act, which went into effect on March 7th, just recently. Talk about the complaints and compliments you've gotten. What has been the reaction so far? Well, I think there is sort of a reaction that is sort of business-like. Are we happy with this regulation? And then there is a private reaction, which is, go, Europe, go.

We may have thought that you were a bit crazy like 10 years ago, but now we're more asking, is there anything of what you do from which we can be inspired? Also because it has become, you know, there's a global focus on technology and the possible harms that also comes with technology and how to harness the risks. So having worked in this field now for almost 10 years,

I have seen that enormous change. And I see it very, very much here in the US. I think in the beginning, more than 70% of Americans said that you cannot touch technology. These are our nation's pride. This is a stupid idea. As to where we are now, where way less than 50% would have the same approach,

realizing that in a society, you need regulation of technology just as well as you regulate for a safe environment or good working conditions or what have you. What's been the biggest complaint you've gotten? You listen to complaints, obviously. You don't make these things just to talk over people. What's the biggest complaint you've gotten? I think most recently, the biggest complaint that we got was the feedback from Apple after our decision on music streaming apps that they said, well, this is ridiculous. There's no harm to consumers. And that, of course,

is something that I find to be quite striking because what we say in that decision that fined them $2 billion was, listen, you're not enabling people to choose a cheaper offer. People would have to pay the 30% Apple fee because you're not allowing music streaming apps to tell their own customers that there is a cheaper way to get their services. And if the price is 30% higher than it could have been, I think that is really obvious consumer harm. You were at it, Silicon Valley, ahead of DMA Compliance Day on the 7th. And you met with some CEOs. Talk about those meetings.

And I'd really like some specifics. Talk about how those went. Well, I never talk about the specifics because people need to be able to have a meeting with me and say whatever they want without that being out in the public. But I found it really interesting to see the CEOs in sort of their natural habitat because when you see how they live, you also see the difference in company culture. You know, the sleek sort of perfect oval of the Apple headquarter compared to sort of the colorful, sort of much more artsy Google environment. I found that interesting because I also see that in how they approach us. Interesting. So Apple's more loose with you?

I mean, Apple, not Apple. Apple's more professional and Google's crazier? You are wackier? Wackier. No, Apple's more professional and Google's crazier. You are wackier. Wackier. No, they're all professional and towards me, very polite. But they're just very different. You know, over the years, you know, we've had so many Google cases, but we have never had the same sort of very... I think Apple very often has the approach,

we cannot be criticized, this cannot be right. And I think that is quite specific for the company culture. And admittedly, they make great products. You know, I'm an iPhone user, have been that for as long as I can remember. So to some degree, obviously, I understand it. So what was the reaction from them? Is it cool? Is it they're trying to convince you? Well, the reaction to the DMA is, I think, twofold.

One's sort of the, yes, we were asking for regulation, but not that exact regulation, as I think you very often get. Because for quite some time, it has been sort of part of the talking point. Obviously, we need regulation of technology only, not the one that politicians would come up with. So that would be the one side of things. Second, when it's a fact of life, because it was tabled, discussed, politically agreed within the European Union in a very fast speed, because it was well prepared, everybody had got their head around it, then there are different approaches to say, well, we'll actually do our best, because things have changed, the world is changing. We kind of accept your

idea that a market must be open and contestable. And others where we will be looking very carefully if they are just doing as little as possible while still being able to say that they comply. Right. So you were working on the Digital Markets Act when we last spoke on Sway in 2021. It was targeting companies you called gatekeepers. Can you explain what that entails and how the companies are impacted for people who don't understand that? Well, what we have seen over the years is a lot of success. And that is great. You know, you're more than welcome to be successful here in the United States and Europe as well. The thing is that when success translates into market power and that market power becomes entrenched and you use that market power to keep others out.

Here we say as well as metaphor, you're a gatekeeper. You're keeping the gate to the market. You decide who can make a business, who will be successful. You were yourself so successful in making it, and now you want to decide who can be successful in the next generation. And the Digital Markets Act is kind of saying, not so much anymore. We need you to open that gate. So the initial gatekeepers companies, Alphabet, Amazon, Apple, TikTok, ByteDance, Meta, and Microsoft, didn't have to submit their plans ahead of time. So how have the first days of DMA been? Are they in compliance?

And how are you ensuring that? And then we'll get to penalties if they don't comply. Yeah, well, we have been in quite close contact. You probably heard that Apple was about to pull the web apps and that has nothing to do with the dma absolutely no reason uh to do that due to the dma so we were in touch with them and the web apps came back up uh we had the issue with epic uh actually on the very compliance day uh epic uh came back up so So we've been talking with the companies to make sure that they had someone to say, should we do this, should we do that? And on compliance day, they have filed with us reports about what they have been doing.

Non-confidential versions of this is available for interested parties. And we'll start a series of a workshop as from coming Monday for the companies to present. What is it that we're doing? What have we been thinking about? What are we doing here? Let's explain what happened to Epic. There was a complaint. Epic Games said Apple terminated its developer account and called it retaliation.

By March 8th, Epic posted an update that Apple had committed to reinstating the account. Obviously, it has an ongoing legal beef with Apple, and it's a big gaming company, not a little startup. So they posted this complaint, which some people could say is a stunt, somewhat of a stunt, but this is what they did. So go ahead. Go ahead. Yeah, but it's not important whether Epic is a bit of a small company. The point is that they would want to do business and they would want to present to their customers, so gamers of all places, well, we would like to

give you a specific app store when you can go for games. Not all that other things, just the game app store. And they should, by the DMA, they should be allowed to do this. So that is one of the interesting things. Next thing would be, for instance, on the iPhone, you would have what is called NFC technology that enables payments. That has so far been for Apple only. And that has restricted, of course, the development and the availability of alternative payment systems.

Because if you cannot use NFC technology, very difficult to apply a payment system. So that would be news. For a company like Google, they would not be able to self-preference. And that is very important for all the companies who provide vertical services, like flight services, hotel services, if you want to rent a car, jobs, all of that, that you actually... Which Google also offers. One is they have to allow users in the U to download apps from app stores other than their own and also don't self-preference themselves. Exactly. From their services.

Exactly. Right. I do want to get a quick how you determine what a gatekeeper is, but what are the steps if they don't comply and how you monitor them? and how you monitor them? Well, to become a gatekeeper, to get the label, you will have to have a certain number of business users and a certain number of end users, so consumers like us. And you'll have to be an important channel for doing business. So it may be that you have some ads, but you have a tiny market share,

and the business community say it's not really important for us to get to our clients, to our potential customers. So even if you meet the numbers, you can actually rebut it. You can say, I meet the numbers, but listen, I'm not that important. And then we can assess whether you should have the label or not. There's a question about like booking.com and x.com, correct? Whether the designation accounts for them. Yeah, so we're in the process of assessing this. There would be two things to consider for X.

There would be X sort of the social media service. There would be X ads. So they are two different things and they have two different effects in the marketplace. All of that is in process, no conclusions taken yet. Also, we could do a qualitative assessment if they don't meet the numbers, but we say, oh, listen,

this is a very, very, very important channel for businesses to do their business. So there are different ways to get the label. And the thing is, once you get the label, you get into sort of a territory of do's and don'ts. Same thing that you have to do. You have to allow another app store. You have to enable people to use your NFC technology. There will be a number of don'ts. You cannot self-preference. So there are this list of do's and don'ts that you have to live up to. If you don't, we can open a, if we

have a suspicion that you don't, we can open a noncompliance case. And if you find that you're not compliant, we have, you know, a toolbox of quite hefty fines. We can double the hefty fines. If there's still no improvement, then there is an end of the road that ends with divestitures or the breakup of a company. Right. road that ends with divestitures or the breakup of a company. Right. So you had this Apple find. You said earlier that Apple's 30% app fee had been an issue. And Apple said it's reducing that fee in the EU for developers who want to be on those third-party marketplace and in Apple's app store. But now there is a new 50 cent per download fee

for apps that hit the million mark. Some people are calling it a poison pill. So talk about bad faith compliance. Is it bad faith compliance? Yeah. So the thing is that we have not taken issue with the level of the fee. For the recent Apple case, the question was that you cannot communicate with your own customers. If you're another music streaming service, you cannot put an email link or a link in your app, say, listen here, follow this link, and you'll have the same service, 30% cheaper. So when we're looking at fees, and we will do that in the coming days and weeks, we'll

see, is that a fee structure that has been made up in order to prevent people from getting the benefits of the Digital Markets Act because it becomes so unattractive because of the fee structure. And that, I think, is a very important endeavor. What about the 50 cent fee? But it's a combination of the 50 cent fee and who should pay it, in what circumstance. And also, if you're in another app store, you also have to pay if you're there. So we will definitely look at this in great detail. And if we find that there's reason to suspect that this has been put up in order to prevent the DMA from working for those who are in an Apple ecosystem, well, then we might very well open a noncompliance case.

So Apple has warned that opening up the iPhone to third-party marketplace and alternative payment mechanisms could make it less safe. This has been their long thing in compromised privacy. Spotify is calling it a scare tactic. Apple has definitely been committed to privacy compared to most tech companies. Do you take their concerns seriously? They're particularly focused in on safety,

and obviously privacy is important. Is that a loophole for them? Could companies use it to undermine antitrust enforcement? Well, I think it's great when companies are committed to privacy. I think really, really great that you can have your own data and they're not being used, which is another benefit from the TMA, that you have the right to say, I don't want you to use my data TMA, that you have the right to say, I don't want you to use my data on other services that you're providing me. I would want to keep them to myself.

So this is a great thing, but we have shown that you can have more than one app store and you can have it securely. So the level of safety has nothing to do with the Digital Markets Act. It is completely for Apple to say, well, this is the safety that we want to provide for our customers. But you're right, I recognize this. Every time there is something that we ask of Apple, they would say that it's not safe until it happens anyway. I admire the safety and the privacy prospects of Apple, but it has nothing to do with whether or not you live up to the DMA. Do you take the concern seriously? Of course, we take every concern seriously, because otherwise we would not, you know,

offer due process. And this is one of the reasons why this most recent Apple case has taken some time. Because when we first sent... Yeah, four years. Yeah. So when we first sent them what we call a statement of objection, so what we think that they're doing wrong in their response to that, you know, we took a lot of their response on board and said, OK, we think that you're right. This case needs to be looked at from a slightly different perspective. So we do take concerns on board. We do listen very carefully because we want to win our cases in court. And I think we can only do that if we're really careful. And what happens here now that this fine, they are appealing it? Where does it go from here, from your perspective? Well, they pay the fine. Actually, we do not have issues with that, either as a bank guarantee or we set up a score account.

And once the courts are done, if we win, the money go back to member states of the European Union and they can do with it what they want, distribute it to their citizens or make a tech foundation for the use of tech for good purposes. I don't know. It's up to them. How long does that take?

Can they exhaust you in this regard in terms of appeals? The appeal doesn't suspend the effects of our decision. You still have to apply it. You saw that in the Google cases, you know, not all of them have been through our court system, but they still have to apply what they have been ordered to do. So, this is, and this is not what you're doing. Do not do something with the same effect. So, you have to pay your fine. Well, obviously, we cannot use the money there either as a bank guarantee or in an escrow account, but you have to pay the fine, and then you can go appeal. And if you're right, you get your money

back. But they have to follow it right now until then you can go appeal. And if you're right, you get your money back. But they have to follow it right now until then. Now, you mentioned Investiture, a breakup being the final tool in your box. It's obviously the most dramatic. It's something that's been part of the Google Alphabet conversation. You find them 8 billion euros in three separate antitrust cases. They've been appealing for years, speaking of long appeals. Last year, the European Commission suggested that Google might have to break up its ad tech business.

Google said the threat is flawed. Where are you in that process, and what tools do you have to actually make them do it? Well, I think the first principle for me is that it's not a good thing that you end up in a situation where breaking up the company is the only solution that you have left, because it shows that there are no other solutions. It's really sort of a mission of last resort. We hope that either what we call regulatory dialogue or the casework and the fines or repeated fines, that will solve it. But I think it is important to have that deterrence as an option in the end, because our one goal is to make the companies compliant with the DMA so that the market opens. You know, our beating heart is that open market where people can compete, where Google basically, they own the ads marketplace, they own the supply side, and they own the demand side. Which means that there are inherent conflicts of interest

in the way that this has been set up. Which means that there's no fine that will solve this. There's no change of behavior that will solve this. And this is why in the statement of suggestion, because here we have an obligation to say what is our intention, that it might end up with some form of divestiture in order to solve that conflict of interest in that specific market of ads. Some critics are saying that he doesn't have the staff or financial ability to take on these kind of issues, whether it's Apple, TikTok owner ByteDance, Meta have appealed the decision to be labeled as digital gatekeepers. Breakup is even more, it requires even more resources. You know, it's an issue in this country with the FTC and the Justice Department. Are you outgunned and outmanned?

And how hopeful are you that the DMA will stand up in court? Because that's where you are going to go with these people. Yeah. Well, of course, we are funded by taxpayers' funding. So, of course, we should have, you know, restrictions on our resources. That is the life of everyone with the public funding. But I am really impressed with what the teams are achieving. Because in some of our cases, for every member of the team, there is one or half a law firm up against them. So, you know, we're really careful. We have very strict priorities. We do the cases that we find are important, that has effect for the end customer. And, obviously, we're really hopeful, and we do think that the TMA will stand up in court, both in its totality, but also for the specifics. Because the Deed to Markets Act reflects what we have learned in all the specific antitrust cases.

You know, one, two, three, now four against Google, quite a number against Amazon, the Apple cases we have had. We have a Facebook case right now. We have a Microsoft case as well. So we learn a lot. And all of that learning has gone into the Markets Act to say, listen, this is what we have learned. These are the do's and don'ts. Instead of individual cases, which take a lot of time and a lot of resources, which take a lot of time and a lot of resources. Let's just restart the game by saying, we designate you from the beginning as a gatekeeper. And this is the recipe for an open contestable market.

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It's about societal risks. Yeah, because the DMA is about securing that there is an open contestable market where businesses of all sizes can be successful. The Digital Services Act is indeed about the services that we use in that market. And it's asymmetrical. So if you're a small guy in that market, you will hardly be touched by this legislation. But if you're a very big guy, so that you will have systemic influence, you have two main obligations. First, you'd have to risk assess your services. Can this service be at risk for people's mental health? Can it be used to undermine elections? And if you find those risks, you need to do something about it. And you cannot just tick boxes because, you know, independent third parties will have to audit if you have done your job. And the second thing that you need to do is you need to set up a system so that you can take down what is considered to be or flagged to you as illegal or harmful,

while at the same time telling to the person whose post is being taken down, you can actually rebut this, and we might have to put your post up again, or as a last resort, you'll have to let the courts decide this thing. It's not about what can you say and what can you not say. That is for every member state in the European Union. They would have, you know, every member state in the European Union. They would have, you know, a ban of hate speech. Obviously, child abuse material is forbidden everywhere. You cannot excite to terrorism or violence or what have you. But the very sort of symbologic is that what is considered to be illegal offline should also be considered and treated as illegal online. And that can only be done if you have the necessary systems.

And, of course, that takes a bit of effort. And right now we have the suspicion that ex-former Twitter, they're not making these efforts. So we have opened a case against them for not complying with having these systems and this risk assessment done. And for TikTok as well, in particular, not having done the risk assessment, how do our service work on people, and in particular, young people? Because I think it's damaging for everybody to see some of the violent material.

It's dissemination of illegal content relating to the Hamas attack against Israel in this case. So where is this investigation, and how are you using the DSA to enforce it? Because that's the mechanism you're using. Yeah. So the investigation is ongoing. We have quite strict deadlines for our work here. But I don't have the reason to update as to when we will be done. So say what X did here specifically,

what you're looking at, so people can understand what it is, the problem you have with it. Well, we saw that after the terrorist attack by Hamas on Israel, there was a lot of content on X, and there didn't seem to be any kind of moderation on that, depending on the laws of the countries of the European Union. And you would need to have that kind of system to say, well, listen, this is flagged to me as being unlawful. I will have to take it down. What we have heard and seen of the organization of X is also that a lot of the moderating staff is not there anymore. So there doesn't seem really to be the resources actually to do the job. Yeah, they fired everybody.

They say it's not their job to do this and they don't need it. They believe in full free speech and this and that. How do you respond to that? Well, it's not really a question of if they think they need it or not because this is the law. And anyone doing business in Europe, they have to follow the law.

It can be social media. It can be you want to produce food or drugs or pesticides or whatever. There are legal requirements, and you need to follow those in order to be able to do your business. So I want to talk about the protections for children you just mentioned. We've heard a lot of talk about that here in the U.S. There was a hearing on Capitol Hill about child sex abuse online in January. We have COPPA, the Child's Online Privacy Protection Rule, but it only applies to kids under the age of 13. It's mostly about collecting personal information. And obviously there's COSA, which is also being

debated right now. How does DSA go further? And have you had conversations with U.S. lawmakers about this? To some degree, not very specifically, but we are in touch in order for interested parties here to understand what it is that we're doing. First, children cannot be profiled. So you cannot do age verification by profiling. So you cannot do age verification by profiling. Second, you cannot do targeted advertising towards children because we consider them to be more vulnerable as a group than others. And obviously, you need to make sure that what they see is age appropriate.

It's really awful because both you see that the amount of child abuse material is going up, the amount of child abuse is going up with digital availability. And what you also see is that some of the material that is available online, for instance, on TikTok, is really, really not for anybody, but really not for children. So speaking of disinformation, this is an election year, not just here in the US, Europe will be voting as well. Do you think the DSA will change misinformation around elections in the EU? And how do you prevent the spillover from places where there are fewer or no guardrails

whatsoever, like in the U.S.? Well, this is, I think, the most essential question for anyone who cares about election integrity, how to make sure that people can make up their own minds without being manipulated. So the DSA will do part of that. So for instance, harmful content, of course, can be difficult to describe. So the DSA is not sort of this or this or this or this or this. It says if you apply a code of conduct,

then we think that you're compliant with the DSA. Because the code of conduct is something that you can, you know, you can discuss it, you can figure out how to make it more relevant, how to deal with these things. And most of the companies in question, I think actually all of them, they subscribe to this. Second, even though it's not the AI Act, it's not the Presidential Order or the G7 Code of Conduct. The pledges that I think 20 big tech companies made in Munich recently to make sure that we will see what is artificially made, that be photos or videos. I think that is a step forward because there will be so much material out there that was never, ever real, which is completely artificial. So the very basic is that you know what you're being exposed to. So what do you do about politicians who are spreading misinformation? We have one maybe that does it a lot, or others too. What do you do about

that? Well, to some degree, I think in most countries they say, well, in an election campaign, there is a bit of a bigger room for political debates. People may exaggerate a bit. But other than that, there will be the same rules for politicians as for anyone else. If you spread illegal content, that content will be or should be dealt with as any other illegal content. You just mentioned AI. The EU has taken steps to create a legal framework with the AI Act. Talk about the highlights. What is in this and what's not that maybe should have been? Well, for me, one of the highlights is the approach to AI. We're not trying to regulate technology because as we speak, probably there

will be a next generation of Gemini or Chatti Bhatti or whatever it may be. It's about the use of AI. And in many use cases, we'll say, well, go, go, go, go, go, this is great. But if there are use cases where, you know, all these cases where your life may take a turn. You want to go to university. AI is used to assess whether you can be accepted or not. You go to the doctor. AI is being used to assess your symptoms. We want to make sure that it also knows the symptoms of a woman having a heart attack because those are not necessarily the same. Can you get a mortgage? Can you get an insurance? In those situations, that can be quite existential for you that the AI is sufficiently qualified to help the decision-making with the data that it's trained with,

with the data that it has been tested with, with how it's being fed by the people who use it. And then we have a few use cases where the use of AI is forbidden, like social scoring, manipulation of children through toys, sort of blankets, surveillance in public space

based on biometrics. So there are some things where we said, here it's legitimate for society to say, we believe in no discrimination. We also do not want AI to discriminate. So many ask us, the law, though, won't go into effect for a year or two. And you just mentioned how quickly a gener of AI is advancing. Are you concerned with the timeline?

We always seem to be in a catch-up mode with these technologies. Yeah, I think that should be a concern for everybody. And, of course, it's good for us because the AI Act will come into effect, you know, part of it in six months and another six months and another six months. But it is sort of a hand in glove aligned with both the presidential order of the US and also the G7 curve to conduct that addresses some of the same issues. G7 curve to conduct that addresses some of the same issues. And here, you know, the businesses who have systemic effects, they're signing up, they're obliging themselves. We see that a new sort of line of business is emerging for red teaming, for instance, for third-party auditing, for making sure that things will actually get done. Because, for instance, red teaming, for making sure that things will actually get done.

Because, for instance, red teaming, this is, I think, really interesting. And we're talking with U.S. colleagues. We have something called the Trading Technology Council to say, well, can we make a standard for what is actually red teaming? How much or how little should you do to tick the box? I have had a red team to look at my AI. This is a team that looks at the safety of it. But go ahead. Yes.

Yes. A red team would try to break it. at my AI. This is a team that looks at the safety of it, but go ahead. Yes, yes. A red team would try to break it. It would try to make a thing, do things that you would consider crazy. Can you do that? It's a way of testing safety. Let's talk a little bit about the U.S. because you mentioned the executive order.

It is not a law. It is an executive order, very different, although it may have effects. It's not the same thing as the U.S. passing laws. an executive order, very different, although it may have effects. It's not the same thing as the U.S. passing laws. Talk about the effect of the U.S. almost doing nothing in this case and how important it is for especially the U.S. to get on board and other big economies with these kind of rules. When we spoke on Sway in 2021, you were hopeful there would be better cooperation with the Biden administration around big tech. Where is the U.S. from your perspective, and how do you feel now that Biden's first term is nearing the end?

Well, I think on technology, the cooperation has never been better. We're trying, you know, both to work on standards. We have the approach to AI. We're working on how to prevent semiconductor shortages again, both to have a bigger footprint in the semiconductor global ecosystem. And semiconductors and technology, well, they are obviously two sides of the same coin. So we have a very strong corporation. And we started this Trade and Technology Council by saying to one another,

listen, our corporation is without prejudice for our legislative processes. We cannot oblige the U.S. to do something in the legislative process. The U.S. cannot oblige us to do the other, because we're different. We don't have the same political dynamics. So we do what we can within the possibilities that our legislative systems gives us. But I'd like a real assessment of how you think the U.S. is doing because Congress has been dragging its feet on tech. Senator Amy Klobuchar and others have been pushing for an antitrust bill, the American Innovation and Choice Online Act. There's not a political consensus even among Democrats. I'd love you to assess the U.S.'s role here and what

it's done. I've been very critical. They're very good at attacking TikTok for sure, but otherwise it's hard to get Congress to sign any more comprehensive guardrails for big tech, especially compared to Europe. You're already well past it in many ways, going way back. Yeah, well, for us now, the big challenge is enforcement, enforcement, enforcement. Because, you know, with legislation, you change perception. With enforcement, you change behavior. And this, of course, is the key of passing legislation. I really admire Amy Klobuchar, Cicelynn, you know, important figures who have, I think, also changed the mindset.

I should not diagnose the finer workings of the U.S. democracy. Obviously, for us who take an interest in these matters, the more jurisdictions which we are globally on this, the better. Because we see that is indeed a global trend. And the more that can be done here, well, the better people will be served also outside of the U.S. I see you're avoiding this, but how do you assess the U.S. doing nothing? It must have an effect. These are U.S. companies for the most part we're talking about. And right now, AI is largely being innovated in the U.S. yet again. What does it say to you? And how do you look at the fact that we can't pass one bill whatsoever?

But, you know, I have to take this as a fact of life because I can do nothing to change it. It doesn't change it if I express one opinion or another about it. My mission is to make sure that we get as close as possible. Well, I'd like to know your opinion. Yeah, yeah. Okay, go ahead. No, as I said to you before, I think it would be beneficial if not only we,

but also other jurisdictions pass legislation, no doubt about it. But I cannot change the situation as it is. I can work with people here. We can inspire people here. We can show them what works while we have a struggle in order to be, you know, also pragmatic and open in how we try to inspire other people. But what we cannot change, we need to take as a given. Do you have an assessment or diagnosis of why we can't pass things here? No. Because Europe is setting global standards. You don't have an assessment of why we can't pass it here.

Well, I hate to say it to you, but we've been busy in making our own legislation. And I think that is where the focus should be and not why other people cannot do it, the same thing. All right. Here's a question. Every week we get a question from an outside expert. Maybe this will give you a clue.

This week we have Congressman Ro Khanna from California's 17th District, represents Silicon Valley. Have a listen and you need to answer it. He's got a question for you. Commissioner Vestager, I'm Ro Khanna. I represent Silicon Valley in Congress. Europe has produced maybe two tech companies of note, ASML and Spotify. In contrast, America has produced Apple, Google, Intel, Tesla, NVIDIA, Microsoft, the list goes on. Do you think Europe should first focus on producing more technology and innovation before trying to tell the world what the policies on innovation and technology should be? All right. That's the America exceptionalism. I'd love to hear what you think about that.

Well, first and foremost, we're not trying to tell the world. We're trying to put some order in the European markets. And Europe is open for business. Some of these businesses, they have their best business in Europe. They do a lot of business, and they are so welcome to do that. And this is why it's really not about where you're headquartered. It's about your behavior in the marketplace. And I think it's completely legitimate in a jurisdiction to say, well, we're an open market. You're welcome to do

business here. These are the rules of the law that goes for everybody. And the second thing is that Europe is a very innovative continent. If you see the shopping spree that some of these businesses have had in European context, you say, oh, wow, they know how to innovate in Europe. What we don't know, what is work in progress, is how to make sure that we fund these businesses better and that we finalize what we did not have when Google and the others were founded, was a real single digital market where you could roll out your product, where you could get real scale. We're getting there. And what I see is a lot of AI that is embedded, for instance, in material, in pharmaceutical machinery,

all of that. So I think we have a fair chance in this next big, big, big chapter of technology that AI will be defining. But I think it is legitimate to say that every jurisdiction have their rules. And whether you want to take the inspiration or not, it's not for me to decide. One of the, at the heart of his question is that regulations hamper innovation and economic growth. Your thoughts? Well, I disagree. Because if you're in a situation where the market is not open, well, who would invest in you as a smaller

business if there's no real chance that you can get to your customers based on your ideas, your hard work, and your investors? But that some other company will actually decide that. So I think that what we're doing is actually pro-innovation because if the market opens, well, you have a much better chance. So, you know, to some degree, we in Europe, we share the American dream that if you have a good idea, if you have the work ethics, if you can persuade investors, you should be able to make it. Because the risk is that those who are, you know,

entrenched and have big, big, big market power, they really do not have a strong incentive to innovate because they can keep monetizing innovation that they made ages ago and they can gobble up new competitors, which is why we now take a very close look at what could be called killer acquisitions, where the small guy is just being bought with a bag of money that may be very difficult to resist.

So I think actually what we're doing is pro-innovation. Another thing that US authorities have been trying to do is antitrust regulations and antitrust cases. There's the cases against Google and Meta are expected to come to a head this year. The FTC's case against Amazon isn't going trial until October 2026. There's the ongoing DOJ investigation of Apple, a case that could come any time. How do you look at these cases? Do you feel like they're important, even from Europe? I know you're trying to do your market, but it obviously has a global effect. Oh, but I do think that they're important. I think that they are very important.

And whenever we can, if we have the waivers from the companies in question, we work with our U.S. colleagues. We help each other if we can. And also we have what we call sort of a sibling to the Trade and Technology Council, which is a technology policy competition dialogue. So we meet every year and discuss whether we think this takes the market. Are there changes to market dynamics? Should we do things differently? So I think that all of that work is really, really important. There hasn't been a lot of success from U.S. regulators.

Do you have any advice for, say, FTC Chair Lina Khan? She's not considered to be as successful as you, for example, faces strong headwinds, including how she manages the department, but hasn't had as much success. None of the U.S. regulators have. Well, I think there's more nuance to that when you look at the casework. They do not have the same legislation as we do. I should say, no, they don't have a DMA to work with.

I think that casework is really, really important, and I admire what they do. Do just know they don't have a DMA to work with. I think that casework is really, really important. And I admire what they do. Do you have any advice for her? No, I don't give advice. I'm not really happy about taking it myself. So why give it? All right. I have two more quick questions. There's obviously a rematch of Biden versus Trump in November. Is that going to affect anything you do? What concerns would you have for Trump 2.0? He doesn't seem to like you very much. No, which is strange because I haven't met him. So maybe. What I see is that to some degree, there is an interest also from the Republican side of the aisle for some of the things that we're discussing. Take, for instance, how to protect children

online. So remains to be seen. Remains to be seen. Last question, your term as Executive Vice President ends this year, what are you going to do next? I don't know. I really truly do not know. There was a slim, slim, slim, slim, slim chance that I could continue in the Commission, but I might also start another chapter of my working life. You know, I have years to go in that, but we can make the agreement that you'll be the first I tell. Oh, all right. You want to continue as a regulator or do you see other opportunities? The mechanism is that in order to be in the commission, your government in your home country

needs to nominate you. And the political party that I come from are not in government. So this is why the chances are really, really slim. But, you know, if you're experienced and still sparkling and willing to work, usually that's something that you can get to do. Will you ever work for a tech company? That would really depend on the tech company. As I said, I have met a ton of companies who are trying to do good in society, fighting climate change, enabling people to take part in their society, making great innovation in health. So there's a ton of good things to be said about tech,

as long as the market is open and contestable. All right. Thank you so much once again. Well, thank you. And congratulations on your book. Thanks. On with Kara Swisher is produced by Naini Maraza, Kristen Castro-Rosell, Kateri Yochum, Sheena Ozaki, and Megan Burney. Special thanks to Mary Mathis, Kate Gallagher, and Andrea Lopez-Crusado. Our engineers are Fernando Arruda and Wick Kwan,

and our theme music is by Trackademics. If you're already following this show, you're a gatekeeper. If not, you're not fit for the digital age. Go wherever you listen to podcasts, search for On with Kara Swisher and hit follow. Thanks for listening to On with Kara Swisher from New York Magazine, the Vox Media Podcast Network, and us. You can subscribe to the magazine at nymag.com slash pod. We'll be back on Thursday with more. Support for this show is brought to you by Nissan Kicks. It's never too late to try new things, and it's never too late to reinvent yourself.

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