European Competition Watchdog Fears Libra's 'Closed Economy'

The European Commissioner for Competition, Margrethe Vestager, is asking tough questions of Libra over its potential closed economy.

AccessTimeIconOct 3, 2019 at 8:00 a.m. UTC
Updated Sep 13, 2021 at 11:31 a.m. UTC

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."

The comments were made in an interview with Denmark's Finansforbundet, picked up by Bloomberg.

“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

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Investing in the Future of the Digital Economy
October 18-19 | Spring Studio, NYC