Norway: Competition Authority

This is an Insight article, written by a selected partner as part of GCR's co-published content. Read more on Insight

Clear impact in markets

Our goal when it comes to enforcement is to have a clear impact in markets through a good balance between anti-cartel activities in a spectre of markets, a strict but effective merger control and advocacy to enhance knowledge and compliance and promote more competition friendly regulation.

The most important decision in 2018 was our all-time high fine of 788 million kroner for Telenor for abuse of dominance in the form of creating barriers for the development of a third mobile network. Norway is one of few countries in Europe that has only two nationwide networks and the impact on the consumers of dampened competition in this market is large. The decision was appealed and the Competition Complaints Board is expected to reach its decision at the end of June this year.

Enforcement work in 2018 was marked by several major investigations, with dawn-raids conducted in the grocery market and the book market. In addition, evidence was analysed from two previous dawn raids in the beer market, for suspicion of abuse of dominance, and in alarm and security services.

In the area of mergers, we continuously strive to clear mergers that are unproblematic as soon as possible. Significantly, 95 per cent of the notified mergers were cleared within the legal limit of 25 days in Phase I. This is a reflection of efforts to enhance efficient case handling with a focus on front-loading resources in the case – with results obviously of importance for the parties involved as well as freeing internal resources for other prioritised cases.

One merger and one acquisition went to Phase II, in both cases resulting in required remedies for approval. In general, the Norwegian Competition Authority (NCA) has a preference for structural remedies. This was used as a requirement for the approval of the ST1 acquisition of Statoil Fuel & Retail in the market for marine fuel oil. However, under special circumstances, behavioural remedies can be accepted. This was the case in the Vipps merger, where a requirement for approval was that potential entrants to the market for payment services should have access on non-discriminatory terms to BankID and BankAxept, core elements of the national payment system in Norway. It can also be mentioned that after a thorough investigation of the competitive effects of Telia’s acquisition of Get/TDC, the NCA approved the acquisition.

Success on appeals

One of the strategic goals of the NCA is to have case handling at a highly international and professional level. The extent that we succeed in this regard is, inter alia, measured by the outcome of appeals. The NCA has, over the past decade, achieved an impressive track record of decisions that has stood the test of appeal.

However, the NCA must now relate to a new framework for appeals. From April 2017, all decisions shall be appealed to the newly established Competition Complaints Board. Previously, decisions where the NCA imposes fines were appealed to the courts, whereas merger decisions and other administrative decisions were appealed to the Ministry of Trade, Industry and Fisheries.

The NCA is content that the first major case dealt with by the Competition Complaints Board resulted in a confirmation of the NCA’s view that six enterprises in the electrical sector violated the Norwegian Competition Act. The companies agreed on identical prices and exchanged other competition-sensitive information prior to submitting bids in a competitive tender for school buildings in Oslo. The collusion took place in spring 2014 and the competitive tender related to maintenance and repairs of electrical installations in the Municipal Undertaking for Educational Buildings and Property’s school buildings. The NCA is satisfied that the ruling emphasises that this type of collusive bidding represents a serious violation and that collusion between competitors costs society major sums of money and means that purchasers and consumers have to pay more for goods and services. However, the Competition Complaints Board also ruled that the fines were too high and reduced the level compared to the NCA decision.

In addition, three complaints about case handling were sent to the Complaints Board – two of them concerning access to file and one concerning the obligation to notify a merger. In all three cases the NCA’s decisions were upheld.

In a case dealt with under the former appeal system, Oslo District Court agreed with the NCA that the publishing companies Gyldendal, Cappelen Damm and Aschehoug infringed the Competition Act when they exchanged information and boycotted the distributor Interpress. However, the court has reduced the fines that were imposed by the NCA. Two of the parties have appealed.

Active advocacy efforts

Related to advocacy, we work to extend the competition frontier. In general, decisions and hearing statements of the NCA from the past few years receive substantial attention by the media. The NCA also follows up earlier reports by presenting findings on, inter alia, conferences and by dialogue with operators in the relevant markets.

A key advocacy achievement is related to the highly regulated taxi market, where we, for many years, have advocated the urgent need for regulatory changes. In 2018, the government issued a public hearing proposing changes in the regulation of the taxi market in accordance with our suggestions. Proposed legal changes, mainly in line with those presented in the public hearing, were presented to the Norwegian parliament in the spring 2019 and are expected to be effective from mid 2020.

Throughout 2018, efforts have been focused on the book market where an agreement between a publishers and a book seller’s association, inter alia, implies the use of fixed book prices are allowed by regulation. The NCA believes that cultural policy goals can be better achieved through competition combined with direct policy means.

In addition, we launched advocacy initiatives relating to the market for funeral services as well as gasoline, pointing out the importance of price conscious consumers, and advocacy related to influencers and bloggers, where we pointed out the limits of cooperation received surprisingly much media attention.

High visibility and increased effort in social media

The NCA works strategically to enhance our visibility and increase knowledge of our work, tasks and decisions using the complete toolbox of communication means and channels, such as chronicles, interviews, participation in public debates, presentations in relevant conferences and social media in innovative ways.

We use social media mainly for advocacy activities and to proactively take part in the public debate with our views. The NCA director general has his own professional Twitter account for professional statements. Our website is still our main platform for information. In 2018, we received about 3,200 news coverages referring to the NCA in the media.

NCA employees are active in the media, for example, by regular publishing op-eds in the leading national business newspapers and through presentations at conferences, guest lectures at the university and at the major business schools as well as industry association meetings. In general, the concerns the NCA raise through various channels receive significant media attention. This enhances the impact of our efforts in the advocacy area.

In sum, this makes us interesting as an important professional source on issues related to competition. With increased visibility in media and social media we are able to reach our main target groups.

Funding for competition research

The NCA allocates funds for research in competition law and economics. The purpose of the grants is to strengthen competition policy research and facilitate knowledge sharing between competition authorities and academia. Educational and research institutions, enterprises and independent individuals can apply for funding. Starting in 2015, the NCA has thus far allocated funds after five application rounds. After the application round in 2018, five new projects or activities received funding, among them, a project with the title ‘Between predation and bid rigging: Competition issues in procurement markets’. These projects will improve the knowledge basis for competition enforcement and contribute to strengthen the ties between the academic community and the competition authority.

A qualified staff

Finally, when it comes to our most important asset, our staff, we have succeeded in building a staff of highly qualified and experienced case handlers. In 2018, we have worked to develop overall and individual plans for competence and career development, train project managers, assemble efficient and multidisciplinary teams and develop mechanisms for sharing knowledge. Ten per cent of our employees have a PhD. As a final note, we are honoured that our staff is in demand internationally, inter alia, in areas such as forensic IT, investigation techniques and economic methods.

Looking ahead

To achieve our strategic goal of having a clear impact in markets, we endeavour to have different types of cases in different markets combined with high quality decisions. We will also work to increase knowledge and compliance and work to be even more visible in media. Our advocacy and outreach efforts will in particular be directed towards small and medium-sized enterprises to enhance knowledge and compliance. We also aim to generate more cases ex officio by, inter alia, continued market surveillance to generate more cases and the use of screening methods. To enhance deterrence, we will prioritise severe cartel cases that might lead to pecuniary sanctions or imprisonment for individuals.

Unlock unlimited access to all Global Competition Review content