Thursday, October 10, 2019

After voting down EC candidate Goulard, the European Parliament should oppose giving France control over both DG GROW and DG CONNECT

The Financial Times' EU reporter Mehreen Khan just reported that the European Parliament has overwhelmingly decided to reject Sylvie Goulard, French president Emmanuel Macron's candidate for what would arguably have been the most powerful position in the new European Commission (this post continues below the tweet):

As Mehreen Khan noted, only 12 MEPs outside her own European-level political group voted for her. Practically all European People's Party and Socialists & Democrats MEPs voted against Mrs. Goulard, a scandal-ridden candidate who failed to provide a convincing answer in her confirmation hearing to the simple question of why one should confirm her as an EU commissioner in light of the fact she had to resign as French minister of defense. She promised to step down should she be ultimately convicted of any wrongdoing, but that was unsatisfactory because it wouldn't have occurred before the end of her term.

Virtually all European media reports in the build-up to the parliamentary decision suggested that resistance to her nomination was fueled by institutional outrage: at least the two largest groups in the European Parliament believe in the spitzenkandidat approach, a word borrowed from German that means "top-list candidate" and stands for the notion that only a candidate for the EP should be named president of the European Commission, the bloc's executive branch of government. But the new Commission president, Ursula von der Leyen, didn't run in this year's EU elections. She was Germany's minister of defense, and came into play when neither the EPP's Manfred Weber or the S&D's Frans Timmermans (whom I've repeatedly called "Poor Man's Bernie") managed to secure a majority.

What only one of the articles I saw mentioned is, however, the issue I'd like to focus on because innovation matters more than retribution: apparently some MEPs were concerned not only about the integrity of that particular candidate but also (or even primarily) about the allocation of fields of policy-making among the different commissioners.

No matter who will be named instead of Mrs. Goulard, what the EP should never accept--for the sake of Europe's fitness for an increasingly digital future--is that one commissioner--and especially not a French commissioner--effectively controls both DG GROW (the Directorate-General for the Internal Market, previously called DG MARKT) and DG CONNECT (Directorate-General for Communications Networks, Content and Technology, previously called DG INFSOC = Information Society).

Formally, the DGs are part of the Commission's "services" and "independent" from the commissioners and their aides ("cabinets"). But that's nominal. In reality, the political appointees make all the decisions.

The IP policy unit is part of DG GROW, and they consistently promote ever broader patents and ever more leverage in litigation for patent holders. By contrast, DG CONNECT has a tradition of, and hard-earned reputation for, being sympathetic to the digital sector. DG CONNECT takes a more balanced approach. They understand the implications of IP enforcement in connection with highly complex and multifunctional products. They realize to a greater extent than some other people that certain startups seek to be protected by patents, while many others need to be protected from patents. And they tend to look at free and open-source software as an opportunity, not merely a threat to other business models.

DG GROW already has the upper hand in IP policy-making. But with DG CONNECT ceasing to be an independent voice within the Commission (which would be the inevitable effect of the same commissioner being in charge), there's a risk of the EU Commission's IP policies completely drifting off balance.

Even the Wall Street Journal's article entitled "Incredible Shrinking Europe," which describes the EU as an economic-policy failure, acknowledges that the Single Market is the one aspect of EU economic policy that is working out--not in the sense of growth or wealth, but sheer size (more than 500 million consumers).

France got the most out of all the backroom horse-trading between the governments of the EU member states:

  • The new Commission president, Ursula von der Leyen, grew up in French-speaking Brussels, was nominated by France (as opposed to her country), and is more likely to pursue an agenda to Macron's liking than to advance Germany's interests.

  • A Frenchwoman, Christine Lagarde, will be president of the European Central Bank and continue its policy of financing southern European governments in contravention of EU law.

  • And France secured not only one of the two most important areas of responsibility within the Commission--the Internal Market (only Competition is similarly important)--but convinced the rest of the EU to allow the Internal Market division to absord and neutralize DG CONNECT.

Not only does France have its own national patent troll (France Brevets), which creates a huge conflict of interest for a French commissioner, but the Macron Administration is on a crusade against global digital powerhouses they generally refer to as "GAFA" (Google, Apple, Facebook, Amazon). Their top-listed candidate in this year's EU elections even likened those companies to large countries such as China.

A French EU commissioner nominated by Macron is, in practical terms, going to be an anti-GAFA commissioner. Giving an anti-GAFA commissioner control over both DG GROW and DG CONNECT is a bad idea. It's ultimately even bad for Europe because the French agenda does not benefit European consumers (who want access to innovative digital products and services) and countries with a stronger innovation culture than France, such as the Nordic countries or even Germany.

France has a rich history, but it doesn't have much of a future. None of its largest corporations (such as LVMH, L'Oréal, and Sanofi-Aventis) is a digital-economy player. Macron likes to think of France as a "Startup Nation," but has no facts to back up that vision. And it's hard to see how this is ever going to improve, given that many of the brightest young French engineers and programmers go to work for GAFA and other non-French companies and, which is so shocking, considering that only 2% of French students reach the top performance level in the TIMSS international math test, roughly at a level with Persian Gulf states. By comparison, 50% of Singapore's students are top performers in math, 40% of South Korean students, 20% of Russian students, and 14% of American students. Even Kazakhstan is at a level with the U.S., i.e., seven times as strong as France.

The French digital policy agenda is to dumb down all of Europe only because France has degenerated. This year's EU copyright reform is an example, as is the French pet project of a "digital tax" (the U.S. threatened with retaliation, but a deal was reached in August). The situation will get a whole lot worse with a Macron appointee controlling both the EU's internal-market and digital-policy divisions--an unprecedented concentration of power that would be undesirable even if the commissioner came from a more innovative country with brighter students.

Hopefully the European Parliament will defend DG CONNECT's independence. Today's vote against Mrs. Goulard opens the door to interinstitutional negotiations. The French government is already afraid of this, and I agree with former Swedish MEP Amelia Andersdotter that commissioner portfolios aren't allocated to countries:

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