The nomination of Professor Fiona Scott Morton, an American economist, as chief economist in the European Commission’s competition directorate-general – the European Union’s competition authority – has triggered opposition, including from France and some members of the European Parliament, who want the Commission to reconsider her nomination. The Commission has defended her appointment as one made on the basis of her qualifications and expertise from her experience in the United States competition authority, and her extensive knowledge of competition economics, particularly in the digital sector.
Critics argue that her US citizenship and previous work for US tech giants might undermine Brussels’s efforts to tackle big-tech market power. Professor Scott Morton, they argue implicitly, might be less likely to protect EU interests, in particular the pursuit of industrial policy objectives, because of her nationality. She might also not be tough enough against big tech because of her previous close ties to companies including Microsoft, Apple and Amazon, leading to potential conflicts of interest.
These arguments are unjustified. They arise from a misunderstanding of the competition authority chief economist role, an undervaluing of the academic work of Professor Scott Morton over the past years and excessive concern about the rules of conflict of interest.
First, the chief economist oversees the economic evidence in competition enforcement, including antitrust, merger and state aid cases, and assists the EU competition commissioner in drafting guidelines. The chief and her team must apply sound legal and economic methodologies supported by solid arguments. In addition, the chief will also probably intervene in the enforcement of the new Digital Markets Act (DMA) that imposes positive and negative obligations on the largest online platforms – most likely for now Alphabet, Amazon, Apple, ByteDance, Meta, Microsoft and Samsung.
It should be noted that competition enforcement is about protecting the competitive process, not competitors. It does not protect less-efficient competitors. In fostering a competitive economy, competition policy complements but does not substitute industrial policy, which is about promoting industries. Despite this, France and Germany have pushed for many years for use of competition law to support their industrial policy objectives of promoting national and European champions, including in the digital sector. Competition enforcement will never sacrifice a vibrant competitive process to create a European champion that would undermine competitiveness in Europe, as the prohibition of the Alstom/Siemens merger in the railway sector in 2019 showed.
Second, Professor Scott Morton is an outstanding competition expert. She is familiar with the jargon of competition economics and laws in Europe and the United States. In particular, she wrote extensively about how competition works in the digital sector and how regulation, including the DMA, can foster competition in the digital economy.
Third, Professor Scott Morton must follow stricter conflict of interest rules than other EU officials. In her first two years in the role, she will, according to the Commission, have to recuse herself from any cases involving companies she worked for in the 12 months before taking the chief economist job. According to Tommaso Valletti, a previous chief economist at the Commission, this limitation will mean the Commission loses “its thinking head and its firepower is diminished.” However, the recusal will not prevent her team from working on the files, and in any event, digital files are, though important, only one sector for the Commission to oversee.
Professor Scott Morton’s views might well pose an issue for those member state politicians and EU commissioners who think that successful industrial policy requires some relaxation of competition enforcement and/or state aid rules inside the EU. Scott-Morton would likely vigorously oppose this approach. But this opposition has nothing to with her nationality. It is a view widely shared among economists, competition authorities and several EU member states.