Who Is the New Vestager? EU Names Teresa Ribera as Competition Commissioner

Ursula von der Leyen recently unveiled her new team of European Commissioners, including Teresa Ribera as the incoming Commissioner for competition. Ribera takes over from Margrethe Vestager, whose tenure was marked by two significant legacies: numerous high-profile lawsuits targeting U.S. tech giants and the introduction of the Digital Markets Act (DMA), a dramatic culmination of Vestager's efforts to rein in American Big Tech. Ribera, inheriting this mandate, will need to navigate ongoing DMA investigations into Big Tech (the first of which are set to wrap up by March 2025) while contending with Europe's broader productivity stagnation and competitiveness challenges, as outlined in the recently released Draghi Report. Ribera's tenure thus comes at an inflection point for European competition policy, and her mandate will likely be critical for determining whether or not Europe can, among other things, begin to narrow its innovation and productivity gap with the United States and slow down its decline versus China.

Ribera's Background: From Climate Champion to Competition Enforcer

A Socialist Democrat and former Deputy Prime Minister of Spain, Teresa Ribera has built her career on climate and energy policy. As Spain's Minister for Ecological Transition, she played a key role in the 2015 Paris Climate Accord negotiations and led efforts to lower energy prices during the 2022 energy crisis by advocating for price caps in Spain and Portugal. However, despite the fact she has an impressive résumé in environmental policy and is a lawyer by training, it is unclear how her broader views on political economy sync with the liberal and market-oriented framework that competition policy typically presumes.

To be sure, given the growing calls by some environmentalists for competition policy to incorporate sustainability goals, Ribera's nomination could be a more calculated move than first meets the eye. But the "green" competition policy that Ribera might pursue poses significant risks that could overshadow any potential benefits, underscoring the need for skepticism. Specifically, there is a risk that sustainability could be weaponized as a pretext for stricter competition enforcement, such as by attacking so-called "green killer acquisitions " as threats to cleantech innovation-a general narrative ITIF has previously debunked. More broadly, there is a legitimate concern that "green" competition policy could open the door to arbitrary enforcement actions under the guise of promoting the ambiguous concept of "sustainability," creating additional uncertainty for businesses already navigating Europe's nebulous notion of fairness. More importantly, the idea that competition policy can have any meaningful role in solving climate change is simply illogical: Global decarbonization will occur only when and if clean energy becomes as reliable and as cheap as dirty energy. Trying to distort competition policy for climate is tinkering around the edges at best.

What to Expect From a Ribera Mandate

Ribera may very well be poised to lead Europe into an era of "green" competition policy. Indeed, her official title as Commissioner for a "clean, just, and competitive transition," as designated by President Von der Leyen, seems to confirm the Commission's desire to use competition policy to address environmental, social, and governance (ESG) concerns. What's more, the Commission itself also recently indicated its intention to explore non-price parameters of competition, such as "sustainability, data protection, and privacy," even though all of these issues are best addressed through other policy means. In addition, in Von der Leyen's mission letter, which outlines the mandates for incoming commissioners, Ribera is specifically instructed to "address risks of killer acquisition," to develop "a clean, circular economy." With this in mind, it appears likely that the "new approach to competition policy" could be a continuation of anti-innovative European competition policy, only worse.

In addition to shoehorning environmental goals into competition policy to no real benefit, Ribera seems likely to reinforce Vestager's hostile attitude toward U.S. technology companies. Europe's Socialists & Democrats party, of which Ribera is a member, states in an online charter that, "while the DMA is a significant step in the right direction, it alone may not be enough to address all of the challenges facing the digital world," potentially signaling even harsher treatment for U.S. tech companies. Furthermore, Von der Leyen's mission letter emphasizes "rapid and effective enforcement actions under the Digital Markets Act" and, more broadly, the need to "strengthen and speed up enforcement of competition rules." Given these statements, it's hard to imagine that Ribera won't adopt a similarly stringent approach-if not more so-toward tech markets as that of her predecessor Vestager.

One wonders if the incoming Commission even bothered to read and take to heart Draghi's report on the future of European competitiveness given that these goals are antithetical to competitiveness. The Draghi report notably makes several useful recommendations for competition policy, including integrating an "innovation defense" in merger reviews and emphasizing European companies' "need for sufficient scale to compete." In response, Von der Leyen's mission letter expresses openness to a competition policy "that is more supportive of companies scaling up in global markets." But this openness will presumably not extend to U.S. companies, which will likely be targeted with severe penalties for achieving scale, such as those dictated by the DMA. Doubling down on harsh enforcement agendas for large U.S. firms while incentivizing European companies to merge and grow (and, ultimately, replace their U.S. competitors) is an unacceptable double standard that throws a wrench in the notion that Europe is pursuing fair competition and will limit, not advance transatlantic cooperation, especially when that is needed more than ever to address the China threat.

All in all, Ribera's approach will likely be a continuation of Vestager's policies on tech while weaving both Draghi Report-style nationalistic innovation concerns and ESG goals into competition policy. Indeed, in a recent Financial Times interview, Ribera stated that "Margrethe has done a great job, and we need to see to what extent this great job needs to evolve... step by step." However, such an approach to competition policy risks creating a framework defined by several and sometimes contradictory objectives that, rather than grow the economy, ultimately create uncertainty for firms doing business in Europe. For instance, suppose a large U.S.-based tech corporation buys a small European green-tech company in a way that would drive increased investments in Europe, produce benefits for European consumers, accelerate innovation, and achieve climate gains-yet create market power under an American flag? How a new European competition policy that amalgamates fairness, consumer interests, sustainability, and innovation goals would assess such conduct is unclear.

A New Era for European Competition Policy?

If approved by the European Parliament, Teresa Ribera will take the reins of European competition policy in December 2024 for a five-year term. As European leaders increasingly see competition policy as a vehicle for implementing an ever-broader set of policy goals ranging from ESG and innovation to justness (fairness), to limiting Gulliver-like American tech competitiveness, Ribera's tenure could well be marked by a doubling down on the anti-innovation and protectionist turn that the Vestager regime embraced. Only this time competition will be used to achieve a wide array of policy goals almost completely unrelated to its core purpose. Doing so plainly risks ignoring the elephant in the room: the urgent need for a strong transatlantic alliance to counter China's growing tech dominance-a challenge European policymakers have all but ignored in the area of competition policy, despite seeing competition policy as a vehicle for seemingly everything else.