Commissioner-designate Thierry Breton

Thierry Breton, the corporate commissioner?

After seeing his first pick for Commissioner rejected by the European Parliament due to concerns of conflict of interests, French President Macron seems to have doubled down with a potentially even more controversial nomination: Thierry Breton, CEO of Atos.

If approved, this would likely be the first time that a CEO was chosen to join the College of Commissioners, a move more reminiscent of the Trump administration than the EU civil service. There is a striking and massive overlap between the interests of the company Breton headed and the remit of the Internal Market portfolio Macron has negotiated for him, including industrial policy, defence, tech and space. This overlap creates a maze of potential conflicts of interest that would be very difficult to solve.

Atos, an active and successful EU player

Breton led the work of of Atos from 2008 up to the end of October 2019, one week after being nominated to become Internal Market Commissioner. The company is a multinational actor which specialises in information technology services, and operates in a wide field of sectors - from cybersecurity, consulting, telecommunications and financial services to healthcare, but also aerospace and defence electronics.

The company has a keen interest in EU politics given the EU’s role as market regulator, but the EU institutions are also a substantial source of funding for Atos. In 2018 alone, the multinational received nearly 107 million euros in funding from the EU Commission and its agencies  Sidenote Data taken from the European Commission’s Financial Transparency System on 24 October 2019.. These contracts cover, for example, projects on 5G networks, artificial intelligence, cybersecurity, big data, high performance computing and financial security.

In 2018 alone, Atos received nearly 107 million euros in funding from the EU Commission and its agencies  Sidenote Data taken from the European Commission’s Financial Transparency System on 24 October 2019. .

Media coverage of Atos and Breton often concentrates on the company’s work on innovative tech products, such as high performance computing. Its role in the security and border management apparatus is less discussed. Atos received 67 million euros since 2014 from the Horizon2020 research fund alone. The two key areas funded are big tech projects (ie 5G and big data) and security, including cybersecurity and border controls.

Atos has also been one of the main recipients of EU funding from the European Union Agency for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and Justice (EU-LISA), to build what have been called “virtual walls”. These are IT systems that control, monitor and survey people at the EU’s external borders. According to the Transnational Institute, these programmes use “stringent controls following generalised threat assessments based on biometrics and features, not in the least skin colour”. Moreover such border control systems can also be seen as trial runs for a possible later deployment in the general population.

An internet monitoring system dubbed ‘Eagle’, which was developed by Atos’ subsidary, Bull, is even now the focus of an investigation by the Paris Prosecutor’s office. The system was sold to various repressive regimes including the Khadaffi regime in Libya, Ben Ali’s Tunisia and the Moroccan secret service, allowing them to monitor citizens and journalists. Breton was a board member of Bull.

If Breton is approved by the European Parliament he would now become responsible for steering EU policy in these areas. The mission letter assigned to Commissioner-designate Breton would put him in charge of investing in technologies like “blockchain, high-performance computing, algorithms, and data-sharing and data-usage tools”; “defining standards for 5G networks”; coordinating an “European approach on artificial intelligence and on the new Digital Services Act”; and, finally, building a real single market for cybersecurity”.

Atos’ lobbying power

Given the importance of EU policy and funding to Atos, it is not surprising that the company is actively lobbying the EU. Since November 2014, high level Commission officials logged 24 lobby meetings with Atos - mostly to discuss digital economy, industrial strategy and cybersecurity.

Yet, in 2018 the company declared spending less than 49,999 euros on lobbying the EU. This amount is a serious misrepresentation of Atos’ lobby activities, as it doesn’t even cover the salary of the 2.5 full time lobbyists it lists. The gap between the declared lobby budget and the company’s actual spend is likely quite significant, as a search shows that Atos paid over 60,000 euros to at least three lobby firms to defend its interests in the EU: MSL Brussels , Schuman Associates and Gplus.

If Breton takes over the Internal Market portfolio, we can only expect that his former colleagues and their lobby intermediaries will attempt to influence him, his cabinet and departments.

Atos is also a paying member of the European Organisation for Security (EOS), which has been been very successful in shaping the EU’s policy on security and border management. According to the Transnational Institute, the EOS has “gained influence to the point that their proposals are sometimes adopted almost wholesale by E.U. bodies.”, especially when it comes to increases in EU investment in security projects.

Atos’ lobby declaration doesn’t even mention the substantial funding it receives from the EU. Its declaration can only be described as misleading, and shows once again the disregard that many multinationals have for making a thorough and honest entry in the absence of a mandatory register.

Transparency does not seem to be Atos’ forté however: they are also not listed in the mandatory French lobby register, in spite of clearly interacting with the French government.

If Breton takes over the Internal Market portfolio, we can only expect that his former colleagues and their lobby intermediaries will attempt to influence him, his cabinet and departments.

Breton, head lobbyist

As the CEO of Atos, Breton himself was often at the forefront of its activities to influence EU policy-making. He has twice met with President Juncker to advocate Atos’ positions - quite a privilege as President Juncker logged a relatively low number of meetings in his whole mandate  Sidenote Data from EU Integrity Watch checked on 5 November 2019 . Breton’s social media also shows that he met with then Vice-President for the Digital Single Market Andrus Ansip and Digital Economy and Society Commissioner Mariya Gabriel.

Gabriel would not be the only person Breton has lobbied that would now become his colleague. French media has reported that he knows President-elect Ursula Von Der Leyen: at the time she was Germany’s Defence Minister, Breton was pushing for the creation of a European Defence and Security Fund. Breton’s personal blog, which is now under maintenance, gave us a snapshot of what he might have been promoting in these encounters. When it came to defence, he called for the creation of the European Defence and Security Fund, that would allow countries to pool funding for defence and place this type of public investment beyond national debt calculations (thus conveniently exempting military spending from EU austerity rules). Atos itself has been a regular invitee to the annual conference of the European Defence Agency  Sidenote In 2016 and again in 2018. .

While the actual European Defence Fund is ultimately different from what Breton had proposed, Atos’ areas of work are largely relevant to the Fund’s stated priorities, and this makes the company a ‘natural’ candidate for funding.

If approved, Atos’ former CEO would be entrusted with “the implementation and oversight of the European Defence Fund“ and “focus on improving the crucial link between space and defence and security.“

Breton has also called for the creation of European internet champions, to face the US corporate behemoths like Google. How does Breton suggest this could be done? In 2015, he argued that it was necessary to “revitalise this entrepreneurial spirit” by scrapping taxes on capital such as the French “solidarity tax on wealth” Sidenote Presiden Macron scrapped this tax in 2018. .

“If we tax capital on the same level as labour and maintain tax rules favouring annuity rather than investment for the transfer of assets whilst limiting the freedom of contributors via disposable portion of the inheritance, we have a fiscal triptyque which manages to dissuade those attempting to innovate.” - Thierry Breton, Let's Build European Internet Champions

That is not all. Breton has attracted some recent attention given that in old interviews he advocated a loosening up of EU competition policy which he claims has “caused industrial disasters”. He also argued for the need to have a European-level industry development policy, explicitly saying that the EU Commission must “encourage the development of major European players who will enable the entire industry of yesterday to play on an equal footing with that of tomorrow.”

Would this mean that as Commissioner, Breton would fight the already weak European anti-trust policy, to the expense of consumers and small and medium companies? Would he defend direct subsidies to already large European companies? Would Atos benefit from such a position?

Making a career in the private sector via public office?

This would not be Breton’s first spin through the revolving door between private and public, between regulated and regulator. He had already previously been plucked from France Telecom (now Orange) in 2005 to become France’s Finance Minister. He stayed in this role for two years. Directly after leaving he took a job at the Rothschild Bank as a senior advisor and within one year he was appointed CEO of Atos.

Breton is a typical member of the French economic and political elites: 35% of the CEOs of companies listed in the Paris Stock Exchange (CAC40) come from the two top universities, which typically train most of the country’s senior politicians and high officials (the Ecole Nationale d’Administration, where Macron studied, and – the Polytechnique, from which Breton graduated), and the Board members of publicly listed French companies have the highest rate of simultaneous mandates in boardrooms among European countries.

Breton’s move to Atos was controversial, with the French anti-corruption organisation, Anticor, filing a complaint in 2015 and again in September 2019 accusing the National Agency for Automated Processing of Offences (ANTAI) of showing favouritism towards Atos in public procurement deals. Anticor mentioned Breton’s revolving door as a possible explanation for the alleged favouritism.

Heading up Atos and its subsidiaries (Bull and Worldline) is not the only role that Breton held when he was nominated as Commissioner either. Thus far it is known that he was until this month a member of boards at Carrefour, Bank of America and Sonatel (a Senegal-based telecommunications company).

How can MEPs solve the conflict of interests maze?

To appease concerns about conflicts of interest, Breton has quit his role as CEO of Atos and announced that he has already sold his shares. These reportedly amounted to nearly 40 million euros in Atos and 5.7 million in its subsidiary, Worldline.

Ensuring that such financial conflicts of interest are resolved is crucial, but it still does not address the potential privileged access and indeed influence that Atos stands to benefit from its CEO joining the EU Commission.

When Breton became Finance Minister, in France he recused himself from all files relating to his then previous employer, France Telecom. Breton would need to do the same in the European Commission to fully comply with the Code of Conduct for Commissioners  Sidenote Article 4 of the Code of Conduct for Commissioners states that: “Members shall recuse themselves from any decision or instruction of a file and from any participation in a discus­sion,debate or vote in relation to a matter that falls under Article 2(6).”

If MEPs are not prepared to veto Breton’s appointment, then they should at least demand that safeguards are put in place to limit the risks, and ensure that they are implemented.

In his declaration of financial interests, obtained by journalists, he has promised to automatically recuse himself from ”any contractual or similar financial management decision that directly concerns Atos or one of its entities". But this is not enough. Breton would still be able to engage with Atos, be lobbied by his former colleagues, participate in Commission discussions and indeed decisions that affect Atos, its subsidiaries and competitors. The risk of privileged access and influence would remain.

Considering the immense overlap between his portfolio and his previous work in the areas of defence, security, competition and tech, if the European Commission were to set up the necessary safeguards, Breton would be nearly unable to do his new job. The only way to solve the many potential conflicts of interest here is for MEPS to refuse the nomination of Breton altogether.

Some have argued that Breton’s history in the private sector is actually a positive. However, the role of a Commissioner is to defend the public interest, not industry’s interest. His experience could arguably be an asset, but it is also a big risk. The only way to diminish the risks arising from switching hats from regulated to regulator is to implement a cooling-off period, which must be at least as long as the one imposed on departing commissioners, currently two years long.

If MEPs are not prepared to veto Breton’s appointment, then they should at least demand that safeguards are put in place to limit the risks, and ensure that they are implemented. Specifically MEPs should:

  • Demand to see confirmation of the sale of shares in advance of clearing Breton’s nomination. Considering the amounts involved, it will be particularly important to ensure that these shares are properly disposed of, and not simply passed on to family members.

  • Assign Breton to a different portfolio during a cooling off period of at least two years.

  • And implement safeguards that Breton would not be allowed:

    • to interact with former colleagues, lobbyists and intermediaries acting on behalf of Atos and subsidiaries;

    • participate in Commission discussions or make decisions which affect Atos and its subsidiaries.

The Legal Affairs committee will now have to assess Breton’s declaration of financial interest and decide how to manage the various potential conflicts of interest. The committee has recently rejected the commissioners-designate from Romania and Hungary on the basis of irreconcilable conflicts.

MEPs must continue to ensure the thorough assessment of the candidate-Commissioner and be prepared to take tough decisions to solve potential conflicts of interest. The sensitivity of such a process, and the need to preserve its credibility, adds weight to calls for an independent ethics body that is fully resourced.

Better rules are also required to create safeguards but also to ensure national governments put forward nominations that match the independence standards EU citizens expect. Improving and standardising the vetting process is necessary to avoid a situation where different standards get applied to different candidates depending on their political affiliations.


Research done in cooperation with the European Network Against Arms Trade

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