Dispute over the new chief economist of the EU competition authority

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Welcome to Brussels: US economist Fiona Scott Morton will become chief economist to EU Competition Commissioner Margrethe Vestager

Photo: Tony Rinaldo / wikimedia / CC BY-SA 4.0

For the first time, the EU competition authority appoints a woman as its chief economist, and for the first time a person from the USA – and there is already trouble: The American economist Fiona Scott Morton (56) is to head the economic department of Competition Commissioner Margrethe Vestager (55) in the future, as the EU executive announced.

Scott Morton currently holds a Chair in Economics at the Yale School of Management in New Haven, USA. She is also associated with the University of Edinburgh and, and this is where it gets spicy, a senior consultant at Charles River Associates, a consulting firm that counts a number of technology companies among its clients.

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New employee: EU Competition Commissioner Margrethe Vestager gets economist Scott Morton at her side

Photo: Virginia Mayo / AP

The economist also has experience in the political arena: From May 2011 to December 2012, during the term of office of former US President Barack Obama (61), Ms. Scott Morton acted as chief economist in the antitrust department of the US Department of Justice. She is due to take up her job in Brussels on 1 September this year, when the current chief economist Pierre Regibeau retires.

When the time comes, it will play a key role in the EU's competition watchdog's investigations into US tech giants such as Alphabet's Google, Apple, Meta and Microsoft. High-profile mergers such as Amazon's acquisition of iRobot and Adobe's Figma deal are also currently on the agenda of the EU competition authority.

Thus, the criticism of the appointment of the American is practically obvious: With her, a person is supposed to participate in the fight against the market power of the US large corporations, who has already earned money by advising these corporations.

Criticism due to possible conflicts of interest

Even in the run-up to Scott Morton's appointment, voices were raised to this effect. In May, for example, various non-profit organizations expressed their concerns about the appointment, including the British anti-monopoly association Balanced Economy Project, the research and campaign group Corporate Europe Observatory based in Brussels, the Irish Council for Civil Liberties and LobbyControl from Germany. They all wrote a joint letter to the head of the EU antitrust office, Vestager.

Scott Morton has "advised a variety of large companies, including Apple, Amazon, Microsoft, Sanofi and Pfizer," according to the seven-page letter, which was posted online. "We (...) are concerned that Prof. Scott Morton's proximity to Big Tech companies will undermine their ability to enforce EU competition law neutrally and effectively against them."

Specifically, the letter writers quote the economist, for example, with an assessment that is said to date back to the time of her consulting work for Apple and Amazon. Scott Morton said that both companies did not violate the law. "This statement de facto anticipates the outcome of an ongoing investigation into these two companies," the letter reads.

The fact that Scott Morton is not a citizen of an EU member state is also criticized. In doing so, the non-profit organizations refer to a passage in the EU regulations that actually makes this a prerequisite. What's more, the US economist's views on competition and antitrust law are also not very well received. According to critics, Scott Morton is pursuing an outdated approach that is increasingly being forgotten worldwide.

EU Commission rejects criticism

Fiona Scott Morton did not want to be quoted as commenting on the criticisms after an interview with manager magazin. Only this much: She is honored to be able to take over the post.

A spokesman for the EU Commission sent a song of praise to the future chief economist at the request of manager magazin, among other things. The Commission concluded that "Dr. Scott Morton was the best candidate for the position" "both because of her qualifications, including her experience as a professor of economics at Yale, and her academic research, especially in the field of industrial organization, with a focus on empirical competition studies, and because of her outstanding performance in the recruitment process."

Responding to criticism that Fiona Scott Morton is not a citizen of an EU Member State, the Commission spokesperson said that the Commission considered that the position should be open to as wide a range of candidates as possible "given the importance of the function and the very specific knowledge and academic expertise required". Therefore, the post was also opened to applicants with non-EU nationality, although there was still a comparatively small number of applications.

And on possible conflicts of interest, the spokesperson of the EU Commission explains in his email that the Commission has solid procedures in place to address and manage possible conflicts of interest. Ms Scott Morton's personal interests had been thoroughly examined, and the economist had informed the competition authority of any actual or potential conflict of interest.

"The appointing authority has taken appropriate measures to mitigate any problems," the spokesperson said. In the future, Ms. Scott Morton should not be involved in cases "in which she worked during her previous work or of which she was aware".

The economist is also not allowed to "deal with files or tasks related to companies for which she worked (or which she had as clients) in the year before joining the Commission". That restriction applies to the first two years of her employment.

At least two years, during which the critics of LobbyControl in Berlin, for example, are likely to follow the work of the EU competition authority and its new chief economist particularly closely.

with Reuters