The top US economist under fire for taking an EU job

She’s described as one of the “best economists in the world” for her area with “excellent credentials” as an academic and a record of public service. Yet Fiona Scott Morton’s appointment as the European Commission’s chief competition economist has unleashed a wave of protest, largely from French politicians.

The Commission’s decision to pluck Scott Morton from her life as a professor at Yale University has pulled her into a row over her passport and her past: She’s a U.S. citizen and she’s the first non-EU person to take such a senior Commission post. She has also consulted regularly for Big Tech firms — most recently for Microsoft on its Activision deal — as she takes a job advising on investigations and regulation against many U.S. tech giants.

Scott Morton is not just any economist; she’s also a former U.S. antitrust regulator and an influential academic who has stoked the U.S.’s renewed interest in tackling the market power of large companies, especially Big Tech, after two decades when Washington mostly went AWOL from aggressive antitrust enforcement.

“The European Commission and, more broadly, us Europeans, are very lucky to have drawn someone of her caliber,” French economist and Nobel Prize winner Jean Tirole told POLITICO last week. Scott Morton is one of the “best economists in the world in the domain of industrial organization,” a major contributor to U.S. thinking on tech regulation and someone who was “strongly motivated” for public service, he said.

Yet French ministers and European lawmakers have called on the Commission to retract the job offer, asking if there weren’t any European economists suitable for the job.

Apparently there weren’t. The Commission only received 11 candidates and some “didn’t have the minimum qualifications required,” said a Commission official granted anonymity to speak freely. “Scott Morton was clearly the most qualified, it was made crystal clear during the selection process,” the official said.

The Commission’s chief competition economist plays a key part in evaluating economic aspects of investigations by the Commission’s antitrust, merger and state aid departments. During her three-year term, Scott Morton could also be called into decisions on how to apply the Digital Markets Act (DMA) that will place a straitjacket on Big Tech firms deemed to hold a gatekeeper position for digital services such as search or apps. She will avoid working on some cases where she previously had a client.

“One of the biggest tasks ahead for DG COMP is the implementation of the DMA,” said one industry executive who was granted anonymity to speak freely. “Is it really wise to appoint somebody who might end up recusing herself in all upcoming big cases?”

This isn’t Scott Morton’s first rodeo. She was criticized in 2020 for not previously disclosing her work for Apple and Amazon in two papers she co-wrote that outlined what antitrust cases could be taken against Google and Facebook. She told Bloomberg that year that neither Apple nor Amazon had paid her to write those papers and that she worked “for companies that I’m comfortable are not breaking the law.”

Scott Morton declined to comment on the EU row or to be interviewed before or after the appointment.

‘All conflicted’

“The problem isn’t conflicts of interest on the way in, it’s conflicts of interest on the way out,” said the Commission official. “For Scott Morton, we even decided to go one step further by asking for a tougher regime.”

The economists “are all conflicted; it’s like recruiting a 3-star chef but asking that he never cook for a competitor,” the official said.

Pierre Régibeau, the current chief economist whom Scott Morton is due to replace on September 1, told POLITICO last month that he wouldn’t work again on any consulting cases involving the Commission. He was responding to complaints from a transparency campaign group over the Commission’s potential “revolving doors” when officials quit and go to work for companies they used to police.

Being American might be harder to brush off, especially as EU officials ramp up talk about “economic security” and “strategic autonomy,” policies that mark a tougher stance on non-EU commercial access to the bloc.

Tommaso Valletti, a professor at Imperial College London who served as the Commission’s chief competition economist from 2016 to 2019, expects that Scott Morton may have to handle “quite sensitive files on the state aid side, for example, semiconductors.”

“The chief economist is American. This can turn into a political issue,” he said, while praising her “excellent credentials.” Having to avoid some Big Tech probes means the Commission “loses its thinking head and its firepower is diminished,” Valletti said.

Scott Morton’s credentials aren’t in any doubt. She began an academic career at Harvard and Stanford universities after studying economics at Yale and the Massachusetts Institute of Technology. She started working on the side as a consultant for Charles River Associates in 2006 before leaving in 2011 to become the U.S. Justice Department antitrust division’s deputy assistant attorney general for economic analysis. She then recommenced her consultancy work.

During her time as a regulator, the agency blocked deals — including the AT&T and T-Mobile telecoms tie-up, forcing AT&T to pay a $3 billion break fee — and began a probe into Apple’s e-books over price-fixing.

Yet she has broken more ground as an academic where she and a colleague described how technology patents can be wielded to control the market, and wrote papers about how digital platforms such as travel reservation websites pressure hotel prices and how corporate shareholdings in rival firms might be problematic. She’s also worked on a project to identify how Amazon, Apple, Facebook and Google may be violating antitrust rules.

“She is super smart, she is very quick and not afraid to take on giants,” said Bill Baer, a former assistant attorney general at the U.S. Justice Department’s antitrust division. Her work elevated the role of competition policy and improving enforcement, he said, paving the way for the current U.S. uptick in antitrust action.

Alberto Alemanno, a law professor at HEC Paris, thinks Scott Morton’s U.S. experience is a plus. “She is an exceptional candidate for the job but also someone capable of reinterpreting that role by cross-fertilizing U.S. thinking into European competition policy,” he said.

That is if she survives the current storm. The Commission said there aren’t any grounds to remove her.

The Commission official said there hasn’t been any talk of her resigning and “she hasn’t expressed any intention of doing so.”

“I don’t see why she should. Because there’s unrest in just one member state?” the official said.