Eurocrats on the Brink

This article appears in the April 2024 issue of The American Prospect magazine. Subscribe here.

BRUSSELS – I was just getting to sleep when the honking began. I stumbled to the window, and a line of tractors motored down the city street. One had a horn that sounded like the “Baby Shark” song. Police in orange pinnies were trying (and failing) to direct traffic.

Angry farmers had been crisscrossing Europe for months, and were now encircling the European Union capital on the eve of a parliamentary summit. They decided to flow into the city right alongside my hotel, the Steigenberger Wiltcher’s. I was with them at 11 p.m. when they first appeared; when they came back three hours later, my enthusiasm was muted.

The list of grievances was long, but the main complaint was that EU policies were damaging farmers’ livelihoods. Expensive measures in the EU’s Green Deal to limit agricultural emissions had not been balanced with compensation for compliance. And waivers to border tariffs and quotas for Ukraine were undercutting Eastern European wheat growers. Both climate change and the war in Ukraine are key priorities in Europe, but EU bureaucrats invested little effort to mollify those affected by the policies.

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Officials were scrambling to respond, delaying rules that mandated keeping some farmland fallow as a carbon sink and protecting “sensitive” EU crops. But farmers weren’t satisfied. “We produce the food and we don’t make a living,” one protester told Reuters. “Because of free trade agreements. Because of deregulation. Because the prices are below the cost of production.”

Earlier that day, at the conference that brought me to Brussels, Andreas Mundt, head of the antitrust enforcement agency of Germany, offered his apologies that he missed a speakers’ dinner the night before. “I could say I was a victim of the farmers who blocked Brussels last night, I couldn’t get in,” Mundt said. “But I could also turn it another way and say I was a victim of European regulation.”

The circumstances that led farmers to burn tires and spray manure at riot police are not isolated. In Europe, a cloistered set of Brussels technocrats, ensconced in siloed bureaucracies, make decisions with limited public input and scant consideration of unintended consequences. The result can be counterproductive: buoying national champions while harming competition, immiserating workers in favor of other goals. “I didn’t want to leave guilt with the farmers. Maybe one should think about if they have a good reason to be on the street,” Mundt told me later.

At a time when the U.S. Congress has all but ceased to function, the EU can actually pass laws. New measures regulating Big Tech and artificial intelligence are coming into force. But the European Commission, which is responsible for implementation, seems to treat regulation and enforcement as separate rather than complementary processes. Olivier Guersent, lead bureaucrat for Europe’s competition directorate, stirred debate at the conference when he called antitrust a “side dish,” diminishing what his own life’s work can achieve.

The European Commission seems to treat regulation and enforcement as separate rather than complementary processes.

By contrast, the Biden administration has tried to coordinate competition, industrial policy, and trade issues through a “whole of government” approach. This has vaulted the U.S. past the EU, with a new aggressiveness against corporate power and a revival of domestic manufacturing. The strategic vision to identify linkages across policies is lacking in Europe, according to civil society groups, former EU bureaucrats, and members of Parliament.

“We’re deluding ourselves [in Europe] that because we passed the laws, we are ahead,” said Cristina Caffarra, the brassy, bejeweled economist who has become a severe critic of the practitioners of Europe’s status quo. In her view, they “haven’t remotely embraced the vision that antitrust is about liberty and the check on power. You are a bunch of Brahmins sitting in a tower, you only meet CEOs.”

Caffarra put on the conference in Brussels, entitled “Antitrust, Regulation and the Next World Order.” Politico termed it the “anti-Davos”; on my first day there, I heard it called Woodstock for antitrust. Top U.S. regulators and law enforcers traveled to Brussels to explain their approach, and maybe inspire some courage across the Atlantic. I joined them to understand why Europe seemed so stuck, after a period in the Trump years when it seemed they were the only ones who cared about corporate concentration and economic liberty.

The Bubble

Rue du Luxembourg, which leads into the plaza that fronts the European Parliament, is the K Street of Europe. In a Brussels teeming with neo-Gothic and Art Nouveau architecture, the buildings here are noticeably taller and sleeker. The street is packed with takeaway shops, the type popular with White House officials who don’t want meetings with lobbyists entered into the logbooks. There’s even a French bakery chain, Paul, that is also on K Street in Washington, about a block from the Prospect offices.

In this milieu, bureaucrats from the European Commission, Europe’s executive branch, ply their trade alongside consultants and lawyers, when they are not speaking at international conferences alongside consultants and lawyers. The Eurocrats, as they are known, are nominally part of an elected government, but more broadly they’re members of a tribe, with the same credentials and pedigrees as their corporate interlocutors, and the same predilection toward slow and steady tweaks rather than paradigmatic change.

Out of the ashes of World War II, Europe gradually pulled its disparate nations, cultures, and languages closer together, forming first a customs union and then a more muscular federal government. But the 27 national governments (the member states) retain most of their sovereignty, and the two biggest dominate the proceedings. “The EU is a French and German institution and everyone else is along for the ride,” said Caffarra.

The European Union has a Council made up of the leaders of its 27 member states, a relatively weak Commission as its executive, and an even weaker 705-member Parliament, who affiliate not by national origin but ideology; currently, the center-right European People’s Party is in charge. All member states must concur on major EU decisions, and even smaller issues are subject to a “trilogue” between Parliament, the Commission, and the Council, with endless backroom negotiations and compromise.

The Commission, which is in charge of both proposing and implementing laws, has the least connection to the public. Its president is elected by Parliament, not voters. Outside of the commissioners of the directorates, who are political appointees, its main policymakers, like DG Comp’s Olivier Guersent, are career bureaucrats.

There was some intentional design here, to give less discretion to Germany and France and more power to the Eurocrats. But without the need to obtain votes, the Commission has no pressure to hear from anyone but the businesses they regulate. And the EU only spends less than 2 percent of total European GDP, making the Commission the bureaucracy of a weak state: underfunded, relegated to the confines of the EU capital, and at significant remove from the population it serves.

U.S. leftists often think of Europe as a progressive wonderland, and in many ways it is, with its strong social benefits, national health care, free higher education, and highly developed taxation systems. But these are legacy policies from an earlier time when social democratic welfare states were built, nation by nation. The EU’s core economic policies, which all member states must obey, adhere to the neoliberal consensus, which favors unfettered free trade, laissez-faire regulation, privatization of public services, and globalized supply chains.

This is in part an artifact of the Maastricht Treaty of 1993, which created the modern EU constitution. Germany conditioned giving up its deutsche mark currency for the euro on strict austerity rules for member states, with limits on deficit spending and on “state aid” for expanding industrial capacity. And the attempt to create a single state out of 27 countries required the free movement of capital and trade. We don’t restrict money from California to Texas; but the free-trade rules, overlaid onto the national structure of Europe, allowed races to the bottom that immiserated labor and boosted capital.

Barry Lynn, the longtime corporate power critic who runs the Open Markets Institute, argues that the neoliberal mindset further fragmented and undermined the Commission in its very structure. “Part of neoliberalism was silo-fication, rather than competition policy being the coating that underlies everything in the political economy,” Lynn said. “You guys have this yard you can walk around in but dare not talk to each other. All the Western governments fell into this situation.”

That describes well the directorates-general of the Commission: One is responsible for competition, another for justice, another for telecommunications, and so on, with little coordination. The different silos predictably undermine one another. For example, the Commission recently signaled an openness to telecom mergers, to support the buildout of digital infrastructure. A similar dynamic exists in defense, where Commission president Ursula von der Leyen kicked off her bid for a second term by urging an increase in EU military spending, to “consolidate our defense industrial base.”

A common strategy to facilitate telecom infrastructure buildout and alleviate severe shortages in industrial capacity for arms and ammunition makes sense. But consolidation could bring its own problems of waste, militarism, and market power. The CEO of the Italian defense multinational Leonardo has explicitly warned antitrust enforcers to back off and let weapons companies merge. “Antitrust weakens us, it doesn’t help us. The concept has a sense in many sectors but we need to identify sectors like security and energy where the competition is global,” Roberto Cingolani told reporters in February.

The Commission’s Secretariat-General could exert stronger control. “Their job is to say, ‘Get the fuck in here. Your two things are in conflict,’ and point in the right direction,” said Johnny Ryan, senior fellow for the Irish Council for Civil Liberties. “That’s all broken at the European Commission.” So there’s a bubble over the Commission, and a bubble among the different directorates that make up the Commission. It’s a nesting doll of weakness, sloth, and ideological mush.

Rise and Fall

For decades, the Commission’s philosophy on competition policy has followed Robert Bork and the Chicago school’s belief that merger review need only concern itself with consumer welfare and economic efficiency. “It got out of hand, what we did in the 1980s, [saying] ‘Let’s leave it to the experts,’” said Tommaso Valletti, who was chief economist for the European Commission’s directorate-general for competition (DG Comp) from 2016 to 2019.

Valletti has chastised the economics profession for assuming they can precisely excise the bad pieces of a merger and keep the good, when in reality post-merger studies consistently show price increases and other harms. He concluded his remarks at the Brussels conference by asking his fellow economists: “The relevant question for us is do we have anything to say about power, and if we don’t … why should people listen to us?”

A 2004 change to merger review standards (known as Council Regulation 139/2004), inspired by Chicago school thinking that prioritized economic analysis and incorporated potential “efficiencies” from mergers, cut investigations of mergers by more than half compared to the previous 13 years, according to a recent working paper by Brianna Rock. Preventions of mergers also fell by half under the new rules. Of the 6,462 mergers announced from 2005 to November 2023, the EU has only prevented 44.

For an extended period, it looked like Europe had broken away from these constraints. Margrethe Vestager, a Danish politician who was the model for the lead character in the TV show Borgen, became lead commissioner for DG Comp in 2014. Across the world, there was meager appetite for challenging giants of industry, particularly the billowing tech platforms. Amid this vacuum, Vestager took action.

The EU’s first case against Google dates back to 2010; three cases in all would eventually yield 8 billion euros in fines. Vestager opened investigations into Apple, Facebook, Qualcomm, Amazon, and Microsoft. She focused heavily on data privacy, leading to adoption of the General Data Protection Regulation (GDPR), which most of the world copied.

Europe’s vaunted set of investigations and fines for the tech platforms had limited practical impact.

Vestager was lauded in the American and British press as a new warrior against Silicon Valley. The animating reason for why Barry Lynn was kicked out of the Google-friendly New America Foundation in 2017 was a press statement praising Vestager for fining Google 2.4 billion euros for self-preferencing its own products. “Sometimes you need to stand someone up as a hero … you hope they play the role,” Lynn reflected. “The Euros deserve some credit for standing in the breach, trying to figure it out by themselves, often with Obama and Trump attacking them.”

The push went beyond digital enforcement. Valletti, who was at DG Comp in this period, explained that the directorate brought a novel theory of harm to challenge the Dow-DuPont merger, arguing that the public would be injured if the merged company didn’t perform enough basic research and development. DG Comp also blocked a merger between Siemens and Alstom, the largest German and the largest French manufacturer of high-speed trains, defying the presumed leviathans of the EU. “There was a lot of pressure, but only DG Comp with 27 member states can have this success,” Valletti said.

But even then, there were warning signs, like the rise of economic consultancies, de facto lobbyists producing reams of analysis but seldom deviating from the philosophy of protecting corporate rents. Caffarra and others have estimated that the three biggest consultancies in Europe earn over $1 billion per year advising corporate clients. “Everybody’s making money hand over fist,” said Caffarra.

A few months after the 2018 approval of a $63 billion merger between Bayer and Monsanto, DG Comp official Daniel Coublucq exited to leading consultant Compass Lexecon, which had lobbied DG Comp for a third party, BASF, that received significant assets from Bayer as part of a divestiture associated with the merger. Coublucq later rejoined DG Comp.

This revolving-door pattern is also common with Big Tech. In 2021, three Eurocrats who led investigations into Amazon, Apple, and Facebook went to work for law firms that have those companies as clients. That same year, DG Comp hired consultant RBB Economics to evaluate its merger tools; RBB has represented Google in all of its cases against the EU. It took until last October for DG Comp to drop RBB.

Valletti left DG Comp in 2019, and at the same time Vestager got a promotion, still running the competition authority but also serving as an executive vice president of the Commission, responsible for something called “A Europe Fit for the Digital Age.” Valletti focused in his tenure on bringing new evidence to the directorate, challenging the established wisdom. But that gradually faded in favor of the same impenetrable language of “efficiency” and “competitive processes.”

One major red flag came during the Trump/Biden transition period in late 2020. Google had announced a merger with Fitbit, the popular fitness tracker. Given Vestager’s preoccupation with concentration of data as the locus of antitrust enforcement, combining the world’s most powerful holder of information with the leading company gathering data on the human body would have seemed clearly off-limits. But DG Comp let the merger through, with some conditions.

To René Repasi, a socialist member of the European Parliament from Germany, the problem was that the merger regulations say nothing about what happens if the conditions are not met. “You can redo conditions but only to alleviate them,” Repasi told me. The silo tendency created further problems, he added. “In the Facebook-WhatsApp merger, there was an explicit paragraph that it might create privacy concerns, but this was not something for DG Comp to check. Same with Google-Fitbit.”

It started to dawn on Europeans that the vaunted set of investigations and fines for the tech platforms, the area upon which Vestager staked her reputation, had limited practical impact. “The Google cases concluded with no change on the ground,” Caffarra said. “Two cases with Amazon, nothingburger. Apple case, opened in 2017, still not concluded. The Microsoft case, not going anywhere.”

Some chalked this up to the elongated timeline for antitrust cases, which never capture the speed-of-light changes in the digital marketplace. (Mundt noted that Germany’s groundbreaking case against Facebook took three years from beginning to end.) But regulation fell short too, in part because it was disconnected from corporate power.

In 2019, a year after the GDPR came into force, Johnny Ryan appeared before the Senate Judiciary Committee and told them that “things I think are looking very bleak for our colleagues at Google and at Facebook … it is highly likely that they will be forced to change how they do business.” At the time, he was working for Brave, a privacy-focused web browser founded by the author of the Javascript programming language.

I asked Ryan what happened. “I was a naïve young man,” he chuckled. In fairness, at the time he added the caveat that the Europeans had yet to enforce their own policy. The Commission shipped out enforcement to member states’ data protection authorities, without much pressure to apply the law as written. Tech platforms quickly realized that if they headquartered in one EU country, they could funnel all GDPR regulatory enforcement there. Google, Apple, Microsoft, and Meta set up shop in Ireland, and Amazon in Luxembourg; both are notorious tax havens with incentives to be friendly to Big Tech. Ryan made a public records request asking how many Irish investigators were working on GDPR, and was told the agency didn’t even have records to find out who was investigating.

“If you have free movement within the EU but strong national state authorities in their territories, it’s obvious that corporates will play them against each other,” said Repasi, and that’s what happened. A parallel problem is that the GDPR didn’t focus enforcement toward the biggest purveyors of data, meaning that the smallest website operators—“local sports clubs and dentists,” Ryan said—felt the biggest relative impact.

“When a member state doesn’t enforce European law,” Ryan added, “the European Commission is the guardian of the treaties of the EU and they should take that state to court … [but] 10 to 15 years ago the Commission stopped taking cases against member states. It’s love instead of power.”

Vestager, who is not expected to remain in charge of DG Comp after this year, no longer receives the same glorious press. She waged an unsuccessful battle to try to get Fiona Scott Morton, an American economist who has consulted for Amazon and Apple, installed as chief economist. In January, Vestager visited Silicon Valley and, in contrast to her previous image as a giant-slayer, took photo ops with tech CEOs. The trip was disparaged by critics as a “selfie tour,” even as DG Comp had open cases with some of the companies visited, like Google.

Michael O’Leary, CEO of Ryanair, called DG Comp “spectacularly incompetent” for failing to safeguard competition in Europe, and urged Vestager to resign. Vestager was one of the few European competition officials not at the conference; she had a scheduling conflict. Caffarra told me: “She has nothing to say.”

The American Charge

Caffarra started her annual Brussels conferences 15 years ago, in the same luxury hotel now owned by a Chinese conglomerate. (U.S. Justice Department officials stayed elsewhere because of the potential spying capabilities.) While it initially focused specifically on antitrust, this year she pitched it more broadly. “The entire posture in antitrust needs to take into account what the world before us has turned into,” she said in opening remarks before a massive ballroom filled with lawyers, government officials, advocates, and corporate types doing reconnaissance. Over 1,900 people signed up for the conference, and the hallways and lounge areas were packed all day long.

In 2015, Lynn brought his staffer, a young journalist named Lina Khan, to the conference. This year, Khan, now the Federal Trade Commission (FTC) chair, appeared via teleconference, and her colleague Rebecca Kelly Slaughter was in Brussels. Slaughter was joined by assistant attorney general for antitrust Jonathan Kanter and his deputy Doha Mekki, and U.S. trade representative Katherine Tai. Consumer Financial Protection Bureau (CFPB) director Rohit Chopra and Council of Economic Advisers (CEA) member Heather Boushey appeared via teleconference as well.

These officials represent the vanguard of a revolution in thinking about political economy, connecting overwhelming market power to the ideals of liberty and democracy that so many see as under threat. “The establishment and established ways of thinking are hitting up against undeniable realities of changes in our world and how the public interest needs to adapt and assert ourselves about what’s happening in our economies,” said Tai in an interview.

On issues like trade, privacy, industrial policy, and antitrust, the output resembles the “bold experimentation” that New Deal officials implemented amid the crisis of the Depression, and a firm break with the neoliberal past. The Justice Department has used labor harms, not consumer harms, to successfully block a big merger in publishing, and the FTC is doing the same for the proposed grocery merger between Kroger and Albertsons. Antitrust cases against Google, Amazon, Apple, and Facebook are in process. USTR shelved a digital trade framework that would have made it difficult for national governments to institute restrictions on data flows across borders. CFPB has used its consumer protection tools to further competition in credit card markets. The CEA is the intellectual heart of the Bidenomics effort to revitalize domestic manufacturing, reduce carbon emissions, and increase labor standards. All of these agencies have worked in close coordination on artificial intelligence, corporate price-gouging, supply chain diversification and reshoring, and more.

While Congress has provided public investment for green technologies and semiconductor factories, most of the laws in the U.S. on these issues have not changed. Instead, aggressive enforcement and a new mindset expanded the boundaries for agency action across the government.

DG Comp’s waning appetite for fighting the tech giants in the late 2010s changed Europe’s governance posture.

It’s starkly at odds with the siloed European approach. “Europe is leading its change at more macro [regulatory] levels,” Tai told me. “But that change is top-heavy … Europe is still more comfortable with the way trade and globalization has operated in the past, than embracing the trade moment right now. The disconnect on our side is the legislating … in the executive branch where we’re moving with a very clear vision. They’re grappling with their embrace of change.”

At the conference, Tai stated bluntly that “every consumer is a worker,” and therefore the public interest cannot be served solely by moderating prices through cheap imports to benefit multinationals. She connected this focus on workers to our “antitrust cousins … using different tools for the same goals.” This was a constant theme of the conference: the need to build a common purpose to use all implements of power—merger enforcement, competition rulemaking, consumer protection, trade agreements, public investment, and public options—as a bulwark against corporate control of society.

There was a real uniformity in the American message. Slaughter explained how economic analysis cannot present allegedly scientific analysis that assumes away the problem of power. Mekki explained that in their biggest cases, “we’ve talked about what power really looks like.” Tai said that Ricardo’s theory of comparative advantage, a founding document of globalization that calls for open trade when another country can supply a cheaper particular good, “doesn’t translate into the real world” because it ushers in a series of nation-specific monopolies. In a wide-ranging one-on-one with Caffarra, Khan talked about “a gap between how antitrust was conceiving of markets and market power and how markets would function, and how those markets were functioning in the real world.”

Kanter and Khan, whose agencies co-authored new merger guidelines that describe what the law says about when corporate tie-ups will be challenged, described how they mean to open up the conversation to the public. Both have visited law schools and business schools, to a rapturous reception, while also talking to people affected by monopoly, from farmers to pharmacists to doctors to owners of community newspapers. “For most of my career, antitrust was the domain of an insular few. We used terms that were exclusionary,” Kanter told Caffarra in a fireside chat. “When you talk to these people, they understand what’s going on. We can learn a lot from them, we just need to invite them into the conversation.”

Caffarra told me later that this activity—not just questioning long-held assumptions but involving the public in that dialogue—would be “unthinkable in Europe.” But she saw a younger crowd at her conference, longing for that engagement. “I had a number of junior lawyers saying ‘the partners didn’t want us to come,’” she said. “I had young lawyers who said this conference was mind-expanding.”

From the confines of his office, Chopra summed up what the Americans were pitching to Europe. “We all need the courage to learn,” he said, citing the title of a paper written by the American Economic Liberties Project. “If we want to save the ideals of democracy, we’ll need to use a totally different playbook.”

A Side Dish?

The tension between the American and European approaches came out in the opening panel. Guersent, DG Comp’s leading Eurocrat, was asked about how Europe can rebuild industrial capacity, after watching the U.S. Inflation Reduction Act draw investment in green manufacturing away. Guersent replied that Europe has already led on this front through state subsidies, and in its Green Deal created a matching clause, enabling member states to equal subsidies that companies could get in the U.S. But Andreas Schwab, a European People’s Party member of Parliament, cautioned that the Commission must guard against jeopardizing fair competition within the EU.

When Caffarra, who moderates just about every panel at the conference, followed up, Guersent snapped. “I hate to say this but by focusing on antitrust you get the impression that competition is either the problem or the solution,” he said. “I’m afraid it’s neither. It’s a side dish.” He pointed to regulatory policies to manage competitiveness concerns, and stated that antitrust can only pick at the edges.

The comment became a punching bag for the rest of the day. Slaughter, the FTC commissioner, forcefully disagreed with Guersent, saying that competition “underlies and is implicated by all the work of government,” citing regulatory examples that can be pro-competitive. “We have to make sure that the next commission does not regard competition as merely a side dish,” Ryan said on his panel.

After the conference, things got interesting on the pages of the Financial Times. Columnist Rana Foroohar, in her recap of the conference, cited the “side dish” comment as evidence of European incrementalism and adherence to outdated consumer welfare thinking. Guersent responded with a letter to the editor, saying that Foroohar had “a clear disdain for facts” and that Europe’s record on competition and mergers is “without equivalent … acting for the longest, and doing the most.” For that reason, Guersent wrote, there is “no need for a radical revolution” in European enforcement.

Guersent’s examples were curious for someone touting a 35-year unblemished antitrust record. Most of them were just from the last year, when DG Comp, amid the strong American response, blocked eTraveli’s merger with Booking.com, Adobe’s merger with Figma, and Amazon’s merger with iRobot, which the Big Tech giant abandoned in January. The U.K. was also challenging the Adobe deal, and the FTC was about to file suit against Amazon-iRobot as well, something Amazon didn’t include in its announcement. Sources speculated to me that Amazon was content to make it look like the EU drove them off of the acquisition, building up a tame enforcement agency as fearsome.

But even if DG Comp’s enforcement genuinely brought Amazon to heel, that would represent the very first Big Tech deal it had ever stopped. The record to that point was one of a lot of grasping at action without much change. The European Digital SME Alliance, a coalition of smaller tech companies, rebutted Guersent in the Financial Times, characterizing their industry as in a “state of crisis” and urging DG Comp to go “beyond the narrow focus on consumer welfare, looking not just at the index of prices, but focusing on the broader economic and societal effects of power accumulation by [Big Tech] giants.”

The defensiveness revealed more about Europe than its leaders perhaps wanted. “The Brussels bubble hasn’t been burst yet,” Valletti said.

Back to Regulation

DG Comp’s waning appetite for fighting the tech giants in the late 2010s changed Europe’s governance posture. “The reaction to Google-Fitbit told the Commission that they reached the end of support,” Repasi said. Rather than endure endless legal cases with minimal results, the EU set out to shape laws to prohibit behaviors before harms proliferated. The result was the Digital Markets Act.

The DMA is a multifaceted set of regulations designed to address unfair practices by the biggest digital platforms, including the tendency to lock in users and preference their own products. There are 23 separate obligations and prohibitions, including a “choice screen” for browsers and search engines, a restriction on transferring user data to power multiple services, a ban on “steering” users toward platform services at the expense of competitors on the platform, alternative app stores for web and mobile, and interoperability (the ability to export data from one website to a competitor). Overall, it’s a menu of options that U.S. reformers have desired for years. And the EU can issue fines for up to 20 percent of global revenue if the platforms don’t comply.

Policymakers sought to correct the pitfalls that made the GDPR ineffective. Rather than forcing compliance on every website operator, it affects only the top six platforms—Amazon, Apple, Google, Meta, Microsoft, and ByteDance, owner of TikTok. (Booking.com will also meet the DMA’s thresholds soon.) And instead of enforcement being the responsibility of the member state regulators, the Commission, through DG Comp, will enforce directly, preventing the “race to the bottom” that we saw with GDPR. Another regulation, the Digital Services Act, has a similar structure.

The new formula was the brainchild of Schwab, a lead author of the DMA. “Germans are for the decentralized approach, I have been arguing for centralized,” he told me. “Now the Commission must prove they can do it.”

One problem with being able to prove that is that DG Comp only has roughly 80 people to assign to enforcement. (Schwab called for nearly tripling that two years ago.) By comparison, 651 companies and associations are working to influence the EU on digital economy issues alone, according to a report from Corporate Europe Observatory and LobbyControl.

The lack of manpower has led Guersent and others to play down early expectations. “They are finally advertising for a chief technology officer,” Valletti said. “You cannot start a huge negotiation with companies that are the biggest in the world by saying, ‘We don’t have the resources, we are very weak.’”

The twin regulatory goals of making digital markets fair and contestable may reach beyond the capacity of the Commission.

Another issue cited by critics is that DG Comp has not laid out specific guardrails for the platforms. After a series of workshops and consultations, the platforms submit a compliance proposal, which DG Comp then decides whether or not to accept. It’s hardly the adversarial process between the regulator and the regulated that one would hope for.

“The easy way out for regulation and enforcement is to tell the companies, ‘Do it yourself and we will check if there is manifest abuse of your theorems,’” said Repasi. “This is what destroyed digital markets from being markets.”

The companies have tended to offer the least they could get away with. Apple announced several changes for the EU, which allowed for a separate app store and reduced commissions on in-app purchases. But it will also charge a “core technology fee” for every download of popular apps outside its app store, and reserved the right to block competing app stores. Apple has also claimed that its compliance with a U.S. court ruling, which added a new tax of 27 percent on outside-the-app web purchases and installed a “scare screen” warning users that Apple cannot vouch for user privacy if they go to the web, complies with the DMA. Epic Games, makers of Fortnight, has called the changes “hot garbage”; Spotify said they “make a mockery of the DMA.”

Google’s announced compliance, according to testing run by one of its chief antagonists, the user recommendation site Yelp, similarly undermines the intent of the law. Yelp analyzed the new search engine results pages that Google provided to them months earlier, and even though Google removed its Google Flights service and created a dedicated section for other shopping and comparison websites, Yelp found “that not only do they violate the DMA’s prohibition against self-preferencing, they actually increase the rate at which users will remain within Google’s walled garden.” While Google was retaining 55 percent of search traffic under the old rules, with the new ones Google is holding on to 73 percent, according to Yelp. Other EU travel sites have criticized Google’s work.

TikTok, Apple, and Meta have already sued over the DMA, forcing the same protracted legal fights the regulation was invoked to prevent. Amazon’s CEO Andy Jassy reportedly lobbied White House officials to place trade sanctions on Europe, to “defend” U.S. companies from the DMA. Apple got its iMessage service exempted, as did Microsoft with its Bing search engine and Edge web browser.

The superficial compliance risks undermining the Commission’s tenuous support from stakeholders, and stokes fears that understaffed bureaucrats will check boxes rather than demand results. “The commission has been passive in this process,” said Max von Thun, Europe director for the Open Markets Institute. “They are having Big Tech companies drive what compliance looks like, rather than saying to tech companies this is what we expect from you.” At the Brussels conference, even DG Comp’s head of digital platforms, Alberto Bacchiega, expressed doubt about full compliance on day one.

The DMA came into force on March 7. One ray of hope is that DG Comp does seem to be responding to complaints. After Apple banned the developer account Epic Games was going to use to launch its app store in Europe, the Commission investigated and Epic had its account restored. The Commission has also opened a formal investigation into TikTok’s compliance with the Digital Services Act, specifically around protection of minors and “risks of addictive design.” Even Google changed its search engine and browser choice screens after the Commission provided feedback.

But the way in which the Commission talks about the DMA shows that the silos remain. At a conference in Washington called Remedyfest, the head of DMA enforcement, Lucia Bonova, gave a presentation where she said, “Contrary to antitrust, which really seeks to punish for a bad behavior, what the DMA is trying to do is to really calibrate the rules so that there are incentives to comply.” The comment again reduced antitrust to a side dish. “There is not a radical rethink, and saying, ‘Do something that is effective or we will break you up,’” Valletti said.

The AI Act, another pathbreaking piece of regulation, suffers from a similar problem. The EU is the first entity in the world that has created binding rules for artificial intelligence. But they are primarily confined to ensuring AI systems are safe, and providing transparency to users about AI-generated content. Market power is not within the AI Act’s scope; it’s being managed under the Commission’s directorate for justice. “It needs to be strongly complemented by aggressive competition policy,” said von Thun, who wrote about the issue for Euractiv. “If [DG Comp] waits around two years for the AI Act to do anything, Big Tech companies will be more dominant and will be hard to regulate them.”

Early returns are again mixed. Civil society groups have asked the Commission to investigate the “partnerships” between AI developers and Big Tech firms, like Microsoft’s tie-ups with Open AI and French developer Mistral. But while the Commission has opened investigations, Vestager, the DG Comp commissioner, said in early March that the Mistral partnership did not raise any competition concerns.

The twin regulatory goals of making digital markets fair and contestable may reach beyond the capacity of the Commission, or of purely regulatory measures. “We can induce platforms to be a little more fair, I think that is achievable,” Caffarra said. “When you are thinking about dispersing power, it is inconceivable that these rules will change that … The reality is that all these companies are just laughing.”

The Next Commission

EU parliamentary elections are scheduled for early June, with the expectation that the Parliament will be shifting to the right. The far-right Identity and Democracy (ID) group includes French nationalist Marine Le Pen’s Rassemblement National (RN) party, the neo-Nazi-linked Alternative for Germany, Geert Wilders’s Dutch Freedom Party, and other anti-immigrant groups in Austria and Italy.

Polls show RN leading the parliamentary vote in France, and Politico estimates that, while the center-right European People’s Party (EPP) will remain the largest in Parliament with the socialists well behind in second, ID could end up with the third-most seats. If ID and its right-wing colleagues in the European Conservatives and Reformists (ECR) obtain even a quarter of the parliamentary slots, they could force EPP to take them on as coalition partners and have a say in EU governance for the first time.

The major questions animating elections in Europe, understandably, are migration and war. As the EU layers on more rules, the backlash from Euroskeptic parties grows. But because political-economy issues are enveloped in bureaucracy, they aren’t encompassed into a counternarrative about democracy, and freedom from market tyrannies.

I asked members running for Parliament whether antitrust and trade were a factor in the elections. “I am always pleading about how brave we were to make sure that the social market economic principles have been translated into digital economy,” Schwab said. “But let’s be blunt, nobody has been excited about this.”

The elections will also lead to the restructuring of the Commission. Von der Leyen, the EPP’s candidate, is expected to retain the presidency, and she could structure the directorates as she sees fit. Every member state gets a commissioner, and member states horse-trade over the leadership of the directorates, balancing their influence with giving everyone some power.

With Germany in the presidency and France’s Thierry Breton likely for the vice presidency, smaller countries can control the directorates. Vestager is not expected to retain DG Comp. “The question is, who takes up that role and are they more progressive and bringing us to the U.S. approach, or someone more conservative,” von Thun said.

Von Thun’s Open Markets Institute is part of a civil society coalition that has put out their own “people’s manifesto” for the elections. “A lot of it is technical about what the DGs should do, at the philosophical level and the practical enforcement level,” said Lynn, who runs the organization. In contrast to von der Leyen’s stronger common defense DG, for example, the manifesto calls for a new industrial strategy DG, combining defense and supply chain resiliency.

The pressure from the outside is intended to pop the Brussels bubble, and there are signs of results. In late February, trade unions successfully got Amazon lobbyists banned from Parliament, only the second time in history that a corporation’s representatives have been removed from the premises.

More fines have come down from DG Comp, this time a 1.8 billion euro levy on Apple for abusive restrictions on music streaming apps. And there’s a continuing fight over Google’s advertising technology systems, which DG Comp suggested might need to be broken up from Google’s parent company, which would be unprecedented.

Even as Guersent called antitrust a side dish at the Brussels conference, he mused about making Big Tech platforms “essential facilities,” which would give competitors full access to platform infrastructure, though that would of course have to pass muster with the courts. It was strong language for a Eurocrat.

But his credibility, and the Commission’s, is on the line, as the regulatory effort, elections, and the informal competition with the U.S. comes to a head. Mundt pointed to his remarks in Brussels, and a successive conference he put on in Berlin, that the enforcement posture is rolling out in stages. “Competition was enforcement 1.0. The DMA is 2.0. Then if that fails, we will go to enforcement 3.0,” he said. “Policymakers will not look at a failure, they will react. Then we will think about structural remedies.” That means breakups.

That debate could crawl Europe closer to its U.S. colleagues, and create virtuous competition among the competition authorities. But the same plodding approach might not reach the finish line in time. Europe has a ton of challenges: raging war, energy shortfalls, porous borders, and the uneasy balance of a cosmopolitan federal authority with intense nationalist sentiment. Political economy in Europe may slot in under those portentous issues. But maybe that’s exactly what Europe’s getting wrong.

“We have a spectacular opportunity to put into place beginning in 2025 a next world system,” Lynn exclaimed in his conference speech. “One that increases radically human liberty, true democracy, deep security, real peace, and the kind of innovation that will help us fight climate change … We can achieve these opportunities only if Europe steps up with a vision of how to address these threats, all of them. There is a great vacuum in the world and that vacuum is here in Europe.”