The European Commission is starting the next round of its intensifying face-off with Big Tech with a handicap.
Three top competition officials, who helped lead high-profile probes into Google, Amazon, Apple and Facebook, have over the past year left to join law firms that act for the tech giants.
That is bad news for EU competition chief Margrethe Vestager and her team of antitrust enforcers. The timing could hardly be worse, as the regulator is about to get broad new powers and responsibilities to ramp up the crackdown on anticompetitive behavior by online platforms.
Vestager has three ongoing antitrust cases into Apple, two into Amazon, one into Facebook and one into Google. That number is likely to increase drastically when the Digital Markets Act (DMA) enters into force. The DMA, which will impose strict limits on the behavior of “gatekeeper” platforms, is in the final stages of negotiations.
But Brussels can no longer count on the 80 years of combined experience of Carles Esteva Mosso, Cecilio Madero Villarejo and Nicholas Banasevic. The three heavyweights have been key to the EU competition regime for the past two decades.
Madero and Banasevic teamed up in the late 1990s on the landmark Microsoft case and later formed the driving force in three Google cases that ended with over €8 billion in fines for the search giant. The EU decision in the first of these cases — a €2.4 billion penalty over Google Shopping — was confirmed by the EU’s lower court in November. Court proceedings on the two other cases remain ongoing.
Esteva Mosso led the Commission’s competition review of mergers and acquisitions between 2014 and 2019, including Facebook’s acquisition of WhatsApp in 2014 and Microsoft’s purchase of LinkedIn in 2016.
While the cases they worked on are criticized for not having sufficiently restrained Big Tech’s dominance, they have first-hand experience in confronting these firms and the tactics of their lawyers.
DG COMP has a number of experienced officials left, including Deputy Directors General Linsey McCallum and Guillaume Loriot and Big Tech antitrust experts Thomas Kramler and Brice Allibert.
“It’s not like the Commission’s naked, but it’s lost three of the key people who have given it its mojo,” said a senior competition lawyer, who did not want to be named as he is involved in multiple proceedings with the Commission. The lawyer described the “mojo” as the “knowledge and the courage to take on the most powerful companies the world has ever known.”
“The big boys [big tech firms] are able to come with a lot of arguments which frankly are bullshit, but most people — including inside DG COMP — wouldn’t be able to call their bluff,” the lawyer said.
Madero was head of antitrust at DG Comp when Vestager hit Google with the three multibillion-euro fines, while Banasevic led the investigations into the search giant. Olivier Guersent, director general of the competition department, called Banasevic “key to the success of a number of the landmark cases that have made the reputation of excellence of DG Competition,” in an email to staff seen by POLITICO.
“To lose Carles [Esteva Mosso] and Nick [Banasevic] in quick succession does look like carelessness,” an EU official said, adding that Madero Villarejo was in a different category as he went off on retirement.
Vestager was sanguine about the departures. “It is important that … there is a need and a respect if people want to do something else,” she said when asked about the trio’s exit. “It’s for us as an organization to make sure that we all the time enable people to grow in their positions, to be there if someone steps aside.”
If her court record has taught Vestager anything so far, it is that she can use antitrust investigations to go after the tech giants — as established in the Google Shopping ruling — but her services need to spend more time and efforts in getting the evidence right, EU judges ruled when overturning a €1.06 billion Commission penalty on Intel end of January. Both findings require more and competent staff.
The Commission in a statement pushed back against the idea that the departure of individuals would fundamentally affect the capacities of the competition department. “The expertise that colleagues have accumulated over time, including highly specialized knowledge and expertise in competition law in the digital sector, remains solidly embedded within the organization, even when individual colleagues decide to leave the Commission,” according to the statement.
European Ombudsman Emily O’Reilly has raised concerns about revolving doors at the European Commission, especially the competition department.
“Two years ago we urged the Commission to take a more robust approach, yet the strategically important DG for competition policy, for example, continues to shed top lawyers to private sector entities with major commercial interests in competition regulation,” O’Reilly said as she escalated an inquiry shortly after Banasevic’s exit.
Banasevic’s departure to the law firm Gibson Dunn, which represents Apple among other clients, was announced in early October. He started his work there in January.
Madero Villarejo retired from the Commission last year. In May 2021, he announced he would join the law firm Clifford Chance, which acts for Amazon, but he quit his work there after barely two months, saying he fundamentally remained a Commission official.
Carles Esteva Mosso in June started at the firm Latham and Watkins, which acts for Facebook and Apple.
Madero Villarejo and Esteva Mosso declined to comment. Banasevic did not respond to requests for comment.
Why they left
The combination of denied promotions and the lure of greatly superior wages in private practice was what caused these officials to leave the Madou Plaza Tower, the 33-story building in Brussels that houses the Commission’s Directorate General for Competition, colloquially referred to as DG COMP, according to four people close to the officials.
Closing the wage gap between public office and private practice has always been an uphill battle. But there is a sense that Brussels has not done all it could to retain its staff.
Careers of Commission officials, especially at the higher levels of management, often collide with the need to find a balance of nationalities — and increasingly of gender. Banasevic’s potential promotion, for instance, ran into Commission President Ursula von der Leyen’s ambition to establish gender equality at all levels of management by the end of her mandate, two people familiar with the matter said.
After 10 years of leading the team that deals with tech antitrust cases, Banasevic was confronted with the Commission’s “up or out” approach for heads of unit: he either had to be promoted, or leave to another DG.
This put Banasevic in a complex game of musical chairs if he wanted one of the top jobs. His big problem was that DG COMP has been a woeful underperformer in gender equality. In 2018, only one out of the 13 top jobs was held by a woman. Thanks to the push from von der Leyen, this has now changed to 6 out of 13, but people following the appointments said the reshuffle meant that Banasevic would not get the job for which he was widely seen as suited: director for information, communication and media.
That meant that Banasevic’s next step to be promoted would almost certainly have to be “out” to another department.
The information, communication and media job Banasevic was tipped for was ultimately taken by a man, Alberto Bacchiega. But since Bacchiega was already director at another department, his horizontal move did not affect the gender equality targets. Bacchiega’s sideways shuffle meant his position as financial services director could be filled by Barbara Brandtner on February 8.
Esteva Mosso was long tipped by many insiders as a candidate to lead DG COMP. But in 2020 that job was filled by Frenchman Guersent, after what two lawyers following the appointment believed to be French pressure.
“The fundamental criterion for senior management selection is merit,” the Commission said in its statement, when asked about the recruitment rules. “The Commission’s gender equality and broader diversity actions are designed … to address current imbalances in representation at middle and senior management level.”
And then there’s the money.
While top Commission officials make between €10,000 and €20,000 per month, or up to €240,000 annually, wages for top competition partners at international firms can go up to several millions of euros per year.
“What these [former officials] typically do is advising the lawyers and the clients behind the scenes. Only few end up leading on cases,” a second lawyer said. “They also try to open some doors, but that may be very difficult here because of the conflict-of-interest rules they are subject to.”
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