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An inter-institutional controversy: the case of Fiona Scott Morton

Published on 31/07/2023

As it enters the final year of its mandate, the European Commission has recently called for a controversy that may be fraught with consequences but is also full of questions by forcing the appointment on 11 July of Fiona Scott Morton, a renowned economist from Yale University who specialises in competition issues, to a key post... before she resigned on 19 July in response to the outcry.

This appointment was chief economist at the Commission's all-powerful DG Competition, an influential post that plays a central role in competition policy, an exclusive competence of the European Union. It was proposed by Vice-President Vestager (who is also a candidate for the presidency of the European Investment Bank), who put forward her views on the subject. undeniable professional qualities and experience for the position. However, it seems that this appointment was made without debate at the weekly meeting of the College and without the Commissioners being duly informed of Fiona Scott Morton's American nationality or her possible conflicts of interest.

The fact that Fiona Scott Morton is American has raised questions about the independence of the European Union from the United States, which is waging economic warfare through its extraterritorial criminal law. Furthermore, US competition policies differ from those in Europe, with the US taking a more laissez-faire approach. Fiona Scott Morton, as chief economist under the Obama administration, could therefore have imported an overly lenient view of businesses, particularly in the digital sector, into her new role.

On the contrary, an editorial in "Sauvons l'Europe" notes that she criticises the theories of the Chicago School on which the laissez-faire approach is based, considering them outdated and largely erroneous. She is supported by many economists specialising in competition and industrial economics.

Her time at the US Department of Justice led her to work on economic policy. She criticises the Chicago School not only for its theoretical merits, but also because it has become an instrument for paralysing the control decisions of public authorities in favour of companies. It proposes new tools for competition policy and seeks an academic consensus to oppose the current doctrine of the American courts, which favours companies in terms of proof (it is the State that must prove the harmfulness of a practice, not the company its harmlessness).

By recruiting Fiona Scott Morton, the European Commission has potentially secured the support of a leading figure in the American antitrust control movement, for which it proposes tools and approaches similar to those used by the European Union to assess practices or concentrations.

Another point of concern was Fiona Scott Morton's potential conflicts of interest in the digital field, which is at the heart of the Commission's action programme. She has worked for various US companies in the sector, but the details of her work are unclear. The Commission mentioned that she would not be involved in the cases she previously worked on for two years, but the exact companies involved are not clearly identified.

This controversy highlights the European Commission's opaque procedures for making appointments to key posts.[1]. Fiona Scott Morton's appointment could have benefited from an in-depth discussion before being finalised. Furthermore, Ms Vestager was unable to defend her choice effectively, particularly in front of MEPs, by raising doubts about possible conflicts of interest and by not providing sufficient information about the services provided by Fiona Scott Morton to digital companies.

In the end, Fiona Scott Morton resigned her post, explicitly citing the political problems that had arisen. by nationality.

It depends on your point of view.

It is interesting to compare two analyses published respectively in the French newspaper "Libération "which presents the viewpoint of its Brussels correspondent Jean Quatremer and POLITICO Europe which presents a much more American and conservative point of view.

Jean Quatremer believes that this episode has weakened Commission President Ursula von der Leyen and Competition Commissioner Margrethe Vestager. He points out that they made a political error by concealing Scott Morton's nationality from the twenty-seven Commissioners (who would have discovered it on Twitter) and by not testing the reactions of the Member States to the unusual appointment of a non-European senior member of staff.[2].

He believes this will have consequences for Ms Vestager, who plans to take unpaid leave to run for the presidency of the European Investment Bank. Her refusal to back down despite the reservations expressed by certain Member States (notably France through its President) and the arrogance displayed at her hearing before the European Parliament are undermining her authority.

The author also points out that U. Von der Leyen will not escape unscathed, since it is likely that she was behind the appointment of F. Scott Morton. His confidence in the Member StatesFrance, in particular, which supported her, is shaken and this could be problematic if she asks for her mandate to be renewed.

Finally, he mentions criticism from the European ParliamentThe three main groups (the conservatives in the EPP, the socialists and the liberals in Renew) had asked for the appointment to be re-examined because of F. Scott Morton's nationality and possible conflicts of interest. He notes that this was not the case for the Green Group, which supported the appointment. The Commission had shown contempt by refusing this request, which could prove detrimental if it wished to obtain the support of the Parliament for a new mandate.

Finally, Jean Quatremer notes the internal weakening of U. von der Leyen, as the French, Spanish, Italian, Portuguese, Luxembourg and Belgian Commissioners have also called for her appointment to be reconsidered.

For his part, the author of an article for Politico Europe (an American political media owned by the conservative German press group Axel Springer) notes that Fiona Scott Morton has become the emblematic figure of antitrust lobbying and transatlantic quarrels over competition and economic policy.

She is a specialist in competition law, particularly in the digital sector, and would have been the first woman and the first American to hold this key position. She could have played a key role in implementing the European antitrust reform linked to the Digital Markets Act, which has already entered into force but whose rules will apply in full in March 2024.

However, "French interests" worked hard against her appointment, arguing that she represented potential conflicts of interest due to her work advising major US technology companies. The author believes that Ms Scott Morton would have opposed those like France who would be tempted to shape competition rules to favour European companies.

Politico highlights the differences between EU and US digital and competition policies.

Finally, the article concludes that the EU should ask itself some important questions about appointments to key posts. These include deciding whether to go for the best person for the job or to favour a European candidate, and whether to adopt a competition policy based on evidence and procedures or a more protectionist policy.

Conclusions:

There are many facets to this case European versus American economic and competition policies, conflicts of interest, procedures for appointments to key posts including cooperation, consultation and agreement of the other institutions (although not formally required for officials, except for the remuneration of special advisers), risks of foreign interference in the decisions of the institutions (the EP is not yet finished with Qatargate), and defence of European sovereignty ....

Fiona Scott Morton's resignation has put an end to the recent media storm, but the questions and consequences remain. What is decisive is the political intelligence of those in charge institutions, to foresee the effects of their decisions and assess in advance how serious they will be for others, including public opinion. weighing up the pros and cons. La transparency and respect for the rules (If this is not done, Europe's image will be damaged and the populist-sovereigntists will benefit. With the next European elections just around the corner, now is not the time.

Editorial Committee

[1] The appointment of the head of cabinet of former President J-C. Juncker to the post of Secretary-General of the Commission gave rise to the same kind of controversy and led to his invalidation. We could also mention the appointment of President Metsola's head of cabinet as SG of the European Parliament.

[2] Art. 28 of the Staff Regulations of Officials and Other Servants of the European Communities states that "no-one may be appointed as an official unless he is a national of one of the Member States, save by way of derogation..." and Art 29.2 states that "a recruitment procedure other than that of a competition may be adopted...in exceptional cases for posts requiring special qualifications".

 

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