Icelandic Competition Authority‘s interventions delivered impact equivalent to 18-29 times its budget (2015-2024)
Updated impact assessment published by the Icelandic Competition Authority
The Icelandic Competition Authority has published a report on the assessed impact of its interventions relating to cartels, abuse of dominant position and anti-competitive mergers, following OECD‘s 2014 Guide for helping competition Authorities assess the expected impact of their activities. The report focuses on the period 2015-2024 but contains results back to 2005. The report is available in Icelandic here.
According to the assessment the impact of the Icelandic Competition Authority's interventions during 2015-2024 relating to cartels, abuse of dominant position and anti-competitive mergers amounted to ISK 11.6-19.1 billion (EUR 77.7-128.2 million) per year on average at 2024 price levels. This translates to 0.29-0.48% of Icelandic GDP – corresponding to 18-29 times the Authority‘s budget during the period.
The methodology, assumptions, and calculations used in the assessment were reviewed by an independent expert, Dr. Katrín Ólafsdóttir, Associate Professor at the Faculty of Business and Economics, University of Reykjavík. Her memorandum regarding the review (in Icelandic) can be accessed here.
Background Information
The Icelandic Competition Authority has previously published impact assessments for the years 2013-2022 (see report no. 4/2023 (in Icelandic)) and 2014-2023 (see report no. 4/2024 (in Icelandic)). This assessment presents updated results covering the period up to and including 2024.
The Icelandic Competition Authority‘s methodology is detailed in report no. 3/2024, Assessed impact of the Icelandic Competition Authority‘s Interventions, Description of Methodology and Assumptions. The report is in Icelandic and can be found here. It is based on OECD‘s 2014 Guide for helping competition Authorities assess the expected impact of their activities, incorporating practices that authorities, such as the European Commission, have used in similar analyses. The OECD guidelines are based on the work of the OECD, academics, competition authorities in various OECD member countries, and previous research on the economic impact of competition authorities.
The core assumption of the OECD guidelines is that competition law infringement by companies, or mergers that distort competition, generally lead to higher prices and poorer quality in the relevant market compared to a market where competition prevails. The estimated impact of a competition authority’s intervention is thus a conservative approximation of the harm averted for customers—consumers or businesses—over a defined period. However, the analysis does not attempt to measure the macroeconomic benefits of competition law enforcement. It does not take into account the various positive effects that active enforcement of competition law can have, such as increased innovation and increased macroeconomic efficiency. Empirical research indicates that the assumptions used are cautious. See for example an overview of research in this area in chapter three of OECD‘s 2025 paper, Assessing the impact of competition authorities‘ activities – OECD Roundtables on Competition Policy Papers, No. 320.
The 10-year average of the Authority‘s impact as a share of Icelandic GDP is a key performance indicator, as defined by the Icelandic government. The current goal that the Authority is expected to attain is 0.5%. The Authority has also been subject to administrative audits from the National Audit Office, which has emphasised that the Authority should regularly assess and publish the impact of the Authority‘s activities, as well as using the results in defining future priorities, objectives, and performance indicators.