‘Abuse of power’: Von der Leyen rapped after backing space mega deal

BRUSSELS — A senior EU lawmaker has slammed Commission President Ursula von der Leyen’s open endorsement of a space deal that awaits competition scrutiny as an “abuse of power”.

In a rare intervention on Thursday, von der Leyen told a space summit in Paris that she viewed a planned €6.5 billion joint venture between the bloc’s top satellite players as exactly the type of industrial champion that the bloc needs to lead in the space economy of tomorrow.

Her remarks drew a stinging rebuke from liberal MEP Stéphanie Yon-Courtin, who anchored the European Parliament’s last annual competition report.

“Endorsing a merger at a conference covered by the media, without any substantive review, is an abuse of power and misconduct,” the French MEP wrote on X.

Von der Leyen was referring to Project Bromo, a joint venture between satellite makers Airbus, Leonardo and Thales to compete, at least in part, with the Starlink satellite-internet service operated by Elon Musk’s SpaceX, which recently went public in the U.S. and is valued around $2 trillion.

“These are the types of industrial champions we need if Europe is to lead in the space economy of tomorrow,” von der Leyen said. 

Her words would have been music to the ears of the summit host, French President Emmanuel Macron, who has publicly backed the project together with Italian Prime Minister Giorgia Meloni.

But they raised red flags with the antitrust community in Brussels, where the project has yet to be formally notified or assessed by the EU executive’s competition department led by Executive Vice President Teresa Ribera.

“What is the point of Competition Commissioner Teresa Ribera and the Directorate General for Competition if it is the president of the Commission who unilaterally decides a case?” Yon-Courtin asked.

Eyebrow raiser

Von der Leyen’s comments, which come nearly a year after the Bromo partners first announced their three-way deal, also raised eyebrows among competition lawyers and corporate lobbyists.

It is highly unusual for EU officials to comment on live merger matters: the Commission received a rap on the knuckles in 2015 from the European Ombudsman after former competition chief Joaquín Almunia made public comments on an ongoing investigation into a banking cartel. 

But dealmakers and their advisers are also starting to come to terms with the new reality: DG Competition’s authority no longer stretches as far as it did in the days of powerful former Competition Commissioner Margrethe Vestager. 

“It was certainly surprising, particularly for lawyers, but I think it was intentional,” John Davies, a veteran antitrust lawyer and consultant at Brunswick, told POLITICO. “The president has clear views about how merger control should now develop and took the opportunity to put a political marker down.”

German center-right lawmaker Andreas Schwab, also a competition expert, suggested a more nuanced reading of the president’s comments. “It was a political comment on the strength of the European industry, not an authorization decision,” he told POLITICO.

The Commission declined to comment, noting that the proposed merger had yet to be formally notified.

Thriving or surviving

Von der Leyen has sought to take ownership of the bloc’s policy to vet corporate deals — in response to demands from France and Germany to bend the EU’s antitrust rulebook to allow for the creation of “European champions.” 

In particular, she has championed an overhaul of the EU’s merger guidelines that would give increased weight to considerations such as innovation, saying these would help companies “to thrive, scale, and innovate.”

But von der Leyen’s assertiveness has put her at odds with Ribera, her Spanish number two, who has defended the traditional role of the EU’s trustbusters in fighting corporate abuse of dominance that inflicts harm on consumers.

“A blank check for companies to merge under whatever circumstances will not make Europe more competitive,” Ribera told a conference at the OECD in Paris last week. “Scale, in itself, is not a goal.”

Backers of the space deal say, for their part, that Project Bromo is a matter of survival for the European space industry against competitors from outside the bloc that have leads in technology, scale and access to funding.

None of the three companies can go it alone, Airbus defense and space chief Michael Schoellhorn, warned in an interview with POLITICO in January. European manufacturers have struggled against larger U.S. competitors as the market shifts from expensive, bespoke satellites toward mass-produced constellations and integrated space services.

Bromo is meant to pool engineering, production and research across Europe’s biggest players, creating the kind of cross-border industrial champion already represented in cross-border European missile maker MBDA. But it wouldn’t compete broadly against SpaceX and would have a joint corporate structure rather than being fully vertically integrated.

Chris Lunday contributed reporting.