From the enforcer: Konkurransetilsynet - The Norwegian Competition Authority

Norway: from the enforcer

Address: Zander Kaaes gate 7, PO Box 439 Sentrum, 5805 Bergen, Norway
Tel: +47 55 59 75 00
Email: [email protected]
Web: www.konkurransetilsynet.no

Contacts

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Lars Sørgard
Director General
Tel: +47 55 59 76 70
Email: [email protected]

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Gjermund Nese
Director
Tel: +47 55 59 59 71
Email: [email protected]

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Magnus Gabrielsen
Director
Tel: +47 55 59 75 32
Email: [email protected]

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Hanne Dahl Amundsen
Director
Tel: +47 55 59 76 27
Email: [email protected]

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Karin Stakkestad Laastad
Legal Director
Tel: +47 55 59 75 36
Email: [email protected]

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Kari Bjørkhaug Trones
Director of Investigation
Tel: +47 55 59 75 86
Email: [email protected]

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Jan Yngve Sand
Chief Economist
Email: [email protected]

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Kjell Jostein Sunnevåg
Director of External Relations
Tel: +47 55 59 75 77
Email: [email protected]

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Margrethe Myrmehl Gudbrandsen
Director of Public Relations
Tel: +47 55 59 75 12
Email: [email protected]

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Stig Hauge Bendiksen
Director of the Administrative Department
Tel: +47 55 59 75 83
Email: [email protected]

Questions and answers

How long is the head of agency’s term of office?

The director general’s term of office is six years.

When is he or she due for reappointment?

The position of director general is due for reappointment January 2022.

Which posts within the organisation are political appointments?

None. The director general is appointed by the King in Council, but this is not a political appointment.

What is the agency’s annual budget?

The annual budget for the Norwegian Competition Authority (hereafter the NCA) in 2021 is 121 million kroner.

How many staff are employed by the agency?

In 2020, the NCA employed 107 (96.8 full-time equivalent).

To whom does the head of the agency report?

The director general reports to the Ministry of Trade, Industry and Fisheries.

Do any industry-specific regulators have competition powers?

No, keeping in mind the caveat below.

If so, how do these relate to your role?

Only the NCA enforces the Competition Act. However, some regulatory authorities have regulatory powers that to some extent overlap with competition matters within their respective sectors. Thus, the NCA cooperates formally with the Norwegian Communications Authority, the Norwegian Water Resources and Energy Directorate, the Financial Supervisory Authority of Norway and the Norwegian Media Authority.

May politicians overrule or disregard authority’s decisions? If they have ever exercised this right, describe the most recent example.

In Norway, the NCA’s independence in individual cases is secured by law. Even though the NCA can be ordered to deal with a case by the Ministry, it cannot be instructed as to decisions in individual cases. Before 2017, the Ministry was the appellate body for NCA merger decisions. The most recent example of a decision overturned based on considerations other than competition policy, is the NCA decision from 2005 where the NCA intervened against the takeover by Prior Norge BA of all shares in Norgården AS. Prior appealed the NCA’s decision to the Ministry of Government Administration and Reform. In its decision to overturn the NCA decision, the government took account of agricultural policy considerations. The Ministry inter alia pointed to the need to maintain Norwegian production of eggs and the income of egg producers.

As a measure to enhance the NCA’s independence, an independent Competition Complaints Board was established in 2017. The board is now the appellate body for all decisions by the NCA in mergers as well as cartel and abuse of dominance cases. At the same time, the possibility to reverse the NCA's decisions based on public interest considerations was abolished.

Does the law allow non-competition aims to be considered when your agency takes decisions?

The Competition Act only allows competition aims to be considered when taking decisions. The purpose of the Competition Act is to further competition and thereby contribute to the efficient use of society’s resources.

Concerning merger control, the NCA shall prohibit concentrations that will significantly impede effective competition, in particular as a result of the strengthening of a dominant position (the SIEC-test; Significant Impediment to Effective Competition). The new standard harmonises the Norwegian merger control review standard with the EU/EEA merger control rules, and is interpreted in line with EU precedents. One consequence of the new and EU-harmonised standard is a shift in the role of the evaluation of efficiencies. Following the amendment, the NCA no longer can take into account all relevant social economic gains, but focuses on the pro-competitive effects which are likely to benefit consumers.

Which body hears appeals against the agency’s decisions? Is there any form of judicial review beyond that mentioned above? If so, which body conducts this? Has any competition decision by the agency been overturned?

As of April 2017, decisions of the NCA may be appealed to the Competition Complaints Board. This board handles appeals on fines in, inter alia, cartel and abuse of dominance cases as well as merger decisions by the NCA. Parties may appeal to Court of Second Instance.

The last time a merger decision was overturned, at that time by the Ministry, was in 2006. In the years after, several merger decisions were appealed against, but none were overturned. The latest (pending) appeal is from Schibsted, after the Complaints Board upheld the NCA's prohibition of its acquisition of Nettbil.

Since 2008, around half of the cartel decisions as well as one decision about abuse of dominance were appealed. Until now, decisions have not been overturned as such, but several fines have been reduced. In one case, the fine was actually increased. In 2021, the Court of Appeal concluded that Telenor abused its dominant position in the Norwegian mobile market and upheld the fine of 788 MNOK. Telenor has appealed this judgment to the Supreme Court. In 2021, the Supreme Court upheld the NCA's cartel fine in the book market.

Has the authority ever blocked a proposed merger? If yes, please provide the most recent instances.

The NCA has blocked 16 mergers since the Competition Act of 2004 took effect until October 2021. In 2020, the NCA prohibited Schibsted's acquisition of Nettbil. The decision was upheld by the Competition Appeals Board, but was appealed to court. In 2019, the NCA blocked Prosafe’s acquisition of Floatel – the two closest competitors in the Norwegian market for offshore accommodation services. The decision was appealed, but before the Competition Complaints Boards decision was taken, the parties withdrew their appeal.

Has the authority ever imposed conditions on a proposed merger? If yes, please provide the most recent instances.

Since the enforcement of the 2004 Competition Act until October 2021, the NCA allowed 31 mergers with conditions. In 2021, the NCA approved the merger between Altia Plc. and Arcus ASA on the condition that the parties divest brands in several markets for the sale of spirits. In 2019, two mergers were allowed with remedies: Tieto and Evry, both providers of software and IT services, had to divest the Evry case management and archiving system for business. In the same year, the NCA intervened in the acquisition of a minority shareholding; Sector Alarm Group's acquisition of Nokas, in the market of security systems, was allowed by a combination of structural and behavioural remedies.

Has the authority conducted a Phase II investigation in any of its merger filings? If yes, please provide the most recent instances.

From 2004–2020, the NCA conducted 86 phase II investigations. Recent cases. In addition to the ones described above, are Sport 1’s acquisition of Gresvig, whichh was cleared by the NCA after a thorough investigation. In Bonnier’s proposed acquisition of Strawberry Publishing, the parties decided to change the distribution of ownership after the NCA had warned the parties that it was considering blocking the merger. Bonnier sold its shares in the publisher Cappelen Damm, which was the main concern of the NCA’s objections. As of October 2021, the Phase II investigations on DNB's proposed acquisition of Sbanken is still pending.

Has the authority ever pursued a company based outside your jurisdiction for a cartel offence? If yes, please provide the most recent instances.

No, the NCA has not pursued any company based outside the NCA’s jurisdiction for a cartel offence.

Do you operate an immunity and leniency programme? Whom should potential applicants contact? What discounts are available to companies that cooperate with cartel investigations?

Yes, regulations adopted pursuant to the Competition Act provide for a transparent leniency programme. The regulations are based on the ECN Model Leniency Programme. Potential applicants may contact the NCA by telephone or email using contact details found on our website. Tip-offs may also be sent through our portal for anonymous notification and encrypted communication with informants.

Is there a criminal enforcement track? If so, who is responsible for it? Does the authority conduct criminal investigations and prosecutions for cartel activity? If not, is there another authority in the country that does?

Yes. The main responsibility for enforcing Norwegian competition regulations, including investigating and responding to offences, is placed with the NCA. The NCA can impose civil reactions for violations (for example, an administrative fine for the company or companies involved). However, Norwegian competition law also has its own penal section. The Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime has the responsibility for carrying out criminal investigations, including competition crime. Normally, cases referred by the NCA to the Public Prosecution Authority will be of a very severe nature. The NCA has not referred any case since the new Competition Act from 2004 entered into force. Penalties under the penal section of the competition law range from fines (to both companies and persons) to up to six years’ imprisonment.

Are there any plans to reform the competition law?

No amendments of major significance are planned.

When did the last review of the law occur?

The Competition Act was revised in April 2016, effective from 1 July 2016. According to the revised Competition Act, a new Competition Complaints Board was established spring 2017. The revision also includes a settlement procedure for cartel cases, which is similar to the EU European Economic Area rules. Another change is a replacement from a total welfare standard to a consumer welfare standard in the merger analysis. Regulations concerning the Norwegian Competition Complaints Board were finalised in detail in 2019.

Necessary amendments and clarifications in the Norwegian Competition Act were adopted by the Norwegian Parliament in 2019, in order to implement a renewed Nordic cooperation agreement for competition cases. The agreement makes it easier to detect competition law offences across Nordic borders, and gives Nordic countries the opportunity to conduct inspections on behalf of each other. The agreement also facilitates the exchange of confidential information between Nordic countries in both antitrust and merger cases.

Do you have a separate economics team? If so, please give details.

Yes, the NCA has a separate economics team, managed by chief economist Jan Yngve Sand.

Has the authority conducted a dawn raid?

In 2017–2020, the NCA conducted dawn raids in eight separate cases. By October 2021, the NCA had conducted two dawn raids that year.

Has the authority imposed penalties on officers or directors of companies for offences committed by the company? If yes, please provide the most recent instances.

No, it would be up to the police to impose penalties on officers or directors of companies for offences committed by the company. However, the NCA may apply for public prosecution. In line with a rule of conditional prosecution, infringements that may lead to criminal sanctions are only subject to public prosecution if the NCA has applied for public prosecution or this is justified by strong public interests.

What are the pre-merger notification thresholds, if any, for the buyer and seller involved in a merger?

Concentrations where the undertakings concerned have a combined annual turnover in Norway exceeding 1 billion kroner shall be notified to the NCA. However, if only one of the undertakings concerned has an annual turnover in Norway exceeding 100 million kroner, notification is required.

For sectors and industries with a structure and degree of concentration that justify an enhanced focus, the NCA has the power to impose an extended duty to notify on specific firms. This implies that the firm must notify everything it does in relation to concentrations.

The NCA also has the power to impose a duty to notify a specific concentration it becomes aware of – even if the related turnover is below the notification threshold levels. The NCA imposes this obligation if it has reason to assume that competition will be affected by the transaction or if other particular considerations indicate that the NCA should examine the case in more detail. This tool is of particular relevance in relation to analysis of established firms buying start-ups and preventing killer acquisitions.

Are there any restrictions on investments that involve less than a majority stake in the business?

According to the new merger regulations, the NCA shall intervene against a concentration if the NCA finds that it will have a significant impediment on effective competition. Regarding restrictions on minority shareholdings, section 16(a) says: ‘The Competition Authority shall intervene against an acquisition of holdings in an undertaking even if the acquisition will not lead to control of that undertaking, provided the acquisition is ‘contrary to the purpose of the Act’.'


Norway: from the enforcer's competition economists

Contacts

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Jan Yngve Sand
Chief Economist
Email: [email protected]

Questions and answers

How many economists do you employ?

In 2020, 42 of the total number of employees of the non-administrative staff were economists.

Do you have a separate economics unit?

There is a separate chief economist team with experienced economists with the majority holding a PhD in economics. The rest of the economists work at the three market divisions that handle the cases at the NCA. There are about 50 per cent economists and lawyers working together in case teams at the market divisions.

Do you have a chief economist?

Yes. Jan Yngve Sand has been our chief economist since October 2020. Sand previously had positions as professor at the Oslo Metropolitan University as well as at UIT – the Arctic University of Norway. Sand was also a member of the Norwegian Competition Tribunal from 2017 to 2020.

To whom does the chief economist report?

The chief economist reports directly to the director general.

Does the chief economist have the power to hire his or her own staff?

Yes, to a large extent. If there is an opening for a new position at the chief economist team, the chief economist will be responsible for the hiring process and provide a recommendation (ranking of candidates) to the director general.

How many of your economists have a PhD in industrial economics?

There are in total 12 people with a PhD in economics at the NCA.

Does the agency include a specialist economist on every case team? If not, why not?

Yes, all case teams include at least one economist, as well as a dedicated person from the chief economist team who provides guidance and quality assurance on the economic analyses to the case team.

Is the economics unit a 'second pair of eyes' during cases - is it one of the agency's checks and balances? If not, why not?

Yes, the chief economist team provides a second pair of eyes during cases and thus is one of the agency's checks and balances. Occasionally, someone from the chief economist team has to head or actively take part in the economic analyses. In this case, this person is transferred to the case team, and a new person from the chief economist team is appointed to review the economic analyses.

How much economics work is outsourced? What type of work is outsourced?

The vast majority of economics work is conducted internally by the NCA. In merger cases, the NCA may outsource data collection by questionnaire surveys, but the processes of defining the questions as well as the economic analyses based on these data are done by the NCA. In some complicated cases, the NCA may ask external experts to provide an opinion note or a report. In cases that go to court, the  NCA often uses external experts to give independent testimonies on the case at hand. Finally, the NCA provides funding for research, workshops and conferences in competition policy through a research fund and has occasionally commissioned research reports.

Organisation chart

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