Rules on the market investigations carried out by the Competition Authority

SECTION I

Scope of application and objective of market investigations.

Article 1 - Scope of application

These rules apply to investigations into competition in a specified market, partly or wholly, and are carried out on the basis of Item c of Article 16(1) of the Competition Act, cf. also Article 16(2) of the Act. The investigation is directed toward finding out whether action need be taken against circumstances or conduct which prevents, limits or affects competition to the detriment of the public interest. Such actions may be directed at the companies that operate in the market in question.

Circumstances according to the first paragraph means, among other things, factors connected to the attributes of the market concerned, including the organisation or development of companies that operate in it. Conduct according to the first paragraph means all forms of behaviour, including failure to act, that are in some way detrimental to market competition without being in violation of the Act’s prohibiting provisions.

If necessary, a market investigation can also involve the actions of public entities that have an impact on the market under examination, cf. Item c of Article 8(1) and Item b of Article 16(1) of the Competition Act.

Article 2 - Object of market investigations

The object of market investigation is to identify possible competitive restrictions and improve the competitive environment in markets where there is reason to expect that circumstances or conduct are present which prevent, limit or have harmful effects on competition to the detriment of the public interest. Such circumstances or conduct that limit the efficiency of markets may include extensive concentrations in the market in question, considerable hindrances on the ability of new competitors being able to begin operations or small competitors strengthening their position. This also includes the actions or failure to act by companies or public bodies which reduce the efficiency of markets.

Indications of such circumstances or conduct as described in the first paragraph and other aspects that give rise to an investigation may include the following:

  1. Activity or organisation in a market that appears to facilitate the harmful tacit collusion of companies in an oligopolistic market.
  2. The price, services, quality and other competitive aspects that provide an indication of the limited function of the market.
  3. The development and organisation of a company with an extremely strong position in a market that may significantly limit the competitive controls that competitors can provide.
  4. Disruption to competition that seems to be due to ownership and management ties between companies.
  5. Anti-competitive discrimination of competitors by public authorities.
  6. Fees and other costs that may limit customer options of transferring their business from one company to another.
  7. Lack of information or unclear terms that may work against customers transferring their business from one company to another.
  8. Insufficient access for companies to facilities that are necessary to enable them to compete efficiently in the market in question.

SECTION II

Preparations and beginning of market investigation.

Article 3 - Beginning of market investigation

The Competition Authority performs market research on its own initiative. Reasoned complaints, suggestions and views of stakeholders and the public can form the basis for market investigation but does not grant complainants an independent position of involvement.

When assessing whether to initiate market research, the following should be kept in mind:

  1. Whether there is a reasoned suspicion of circumstances or conduct which prevents, limits or affects competition to the detriment of the public interest;
  2. The importance of the market in question for consumers and the economic sector;
  3. Indications and earlier cases that relate to competition restrictions in the market;
  4. Probable direct and indirect effects of competition restrictions on consumers;
  5. Estimated cost of investigation;
  6. The prioritisation of the Competition Authority; and
  7. Funding allocated to market investigations.

Article 4 - Investigative schedule

The Competition Authority prepares a plan on the arrangement of market investigation as the basis for the decision for an investigation. The plan shall at least address the following:

  1. The markets to which the investigation is to be directed.
  2. Who is operating in the market in question.
  3. Those circumstances or conduct that the Competition Authority considers necessary to investigate on the basis of Item c of Article 16(1) of the Competition Act.
  4. The organisation of information collection at the beginning.
  5. The timeframe for the investigation, including when information gathering is to be completed and when the initial assessment report is to be presented.

Article 5 - Decision making, project management and consultation

The Board of Directors of the Competition Authority shall discuss the investigation plan according to Article 4 and confirm it. The confirmation of the investigation plan heralds the initiation of the market investigation.

On having received the proposal of the Managing Director of the Competition Authority, the Board of the Authority is authorised to appoint a consultative committee for each market investigation. The role of the consultative committee is to provide professional advice and assistance relating to the market investigations of the Competition Authority. The consultative committee shall consist of at least two outside parties.

The participants of the consultative committee are subject to all job responsibilities according to the Administrative Procedures Act, the Competition Act and the Civil Servants’ Rights and Obligations Act, including confidentiality. In confirmation thereof, they must submit a signed declaration thereto. The work of the consultative committee is a part of the internal work of the Competition Authority and documentation relating to the group considered working documents according to Article 16 of the Administrative Procedures Act No. 37/1993.

The Managing Director of the Competition Authority presents an investigation schedule to the Board and bears responsibility and manages the execution of the market investigations in other respects. The Managing Director is the responsible party as regards market investigations in external relations.

SECTION III

Procedure.

Article 6 - Notification of the beginning of a case and delays

The parties against whom the investigation is directed at its beginning shall be notified of the investigation. The same applies to parties against whom the investigation may be directed at a later date. The decision on the beginning of a case shall also be announced in a press release on the website of the Competition Authority. In general, the announcement shall state the items specified in Article 4.

If it is foreseeable that there will be delays from the initial timetable of the investigation according to Item e of Article 4, the parties to the case must be made aware of the changes to the timetable. The same shall be done to the press release on the website of the Competition Authority.

Article 7 - Rules on proceedings

The parties against whom the investigation is directed and who may undergo measures according to Article 16 of the Competition Act enjoy the rights provided for in the Administrative Procedures Act No. 37/1993 and in the rules of the Competition Authority No. 880/2005.

The provisions of the Administrative Procedures Act and Section III of Rules No. 880/2005 apply as applicable to the execution of the case involved in the market investigation of the Competition Authority.

Article 8 - Initial assessment and the gathering of opinions

On completing the collection of information and assessment of data, a draft result of the market investigation shall be compiled in a separate initial assessment report. The initial assessment report shall be sent to the parties against whom it is directed, and they shall be granted a reasonable deadline to return their written comments thereto. The report, without confidential information, shall be published. As a rule, the views of those against whom the result are directed shall also be published.

After the publication of the initial assessment report, the Competition Authority shall organise an open meeting where stakeholders and others shall have the opportunity to submit their views of the report. The arrangement of the meeting shall be announced in advance.

If the Competition Authority is of the opinion that an onerous decision may be made in the wake of a market investigation, including measures to change the conduct and organisation of companies, a statement of objections shall be issued in connection with the initial assessment report according to Article 2. The statement of objections shall in other respects be governed by Article 17 of Rules No. 880/2005 on the procedures of the Competition Authority.

SECTION IV

End of investigation, etc.

Article 9 - End of investigation.

On completion of data compilation and procedures, the Competition Authority shall make a decision on the manner in which to end the market investigation. The resolution may involve one or more of the following solutions:

  1. Decision where the authorisations of Article 16 of the Competition Act to change conduct and/or organisation of companies are used.
  2. Decision where the authorisations of Article 16 of the Competition Act are employed against the competitively restrictive practices of public authorities.
  3. Special investigation initiated of possible violations of the prohibition rules of the Competition Act or instructions in the decisions of Competition Authorities.
  4. If the results of the investigation do not lead to a binding intervention, they are stated in a report that is published. The same applies if part of an investigation does not lead to a binding intervention. In such cases, the Competition Authority may issue an opinion and recommendations in connection with the substance of the report.

Article 10 - Board involvement, etc.

The Board discusses the results of market investigations which are submitted to it, for approval or rejection, decisions on the basis of the investigations that involve intervention according to Item c of Article 16(1) of the Competition Act or other provisions of the Act.

An investigation, or a part thereof, that leads to a binding intervention is closed by a decision pursuant to Section IV of Rules No. 880/2005 on the procedures of the Competition Authority.

Market investigations, procedures and decisions in other respects are governed by Rules No. 880/2005 on the Rules of Procedures of the Competition Authority and the rules of procedure of the Board of Directors of the Competition Authority No. 902/2011.

SECTION V 

Entry into effect.

Article 11

These Regulations are adopted on the basis of Article 8(2) of the Competition Act No. 44/2005 and enter into force on publication.

The Competition Authority, 8 May 2013 Páll Gunnar Pálsson.

B-section – Date of issue: 27 May 2013