European Competition Watchdog Fears Libra’s ‘Closed Economy’
Margrethe Vestager, the European Commissioner for Competition, is asking tough questions of Facebook over its proposed leap into cryptocurrency.
The questions include whether Libra will be an open platform for commerce, what currencies will be accepted and whether organizations or individuals who use the currency will get “a special advantage.”
“It’s a new thing that we’ve begun to ask questions about something that doesn’t yet exist,” Vestager said.
Despite these unknowns, Vestager is keeping an open mind to a range of potential outcomes at launch:
“There may be a problem that you get a completely closed ecosystem that has nothing to do with the rest of the economy,” she said, later adding, “[Y]ou can do it in a way that is open to competition, in terms of the way you pay.”
The European Commission launched an investigation into the Libra Association’s potential anti-competitive behavior in August. The scope of the investigation includes the impact on users’ data and the integration of Libra into Facebook owned Whatsapp and Messenger.
“We want to be far enough ahead that we can say whether this will be a problem,” Vestager said. She noted the commission isn’t the only organization with questions of Libra, “It may be that our central banks will be most interested in it.”
Transparency has been a recent flashpoint in the public conversation surrounding Libra.
Yesterday, previously unheard-from Libra Association members expressed discontent over the regulatory scrutiny of the project. And it took a leaked transcript of a closed-door meeting to hear Facebook CEO Mark Zuckerberg’s thoughts on the firm’s approach.
European Commission photo via Shutterstock