Illegal collusion

Í Article 12 of the Competition Act states that organisations of undertakings are prohibited from deciding on restrictions of competition or encouraging barriers that are prohibited under the law or that breach decisions made under the law. But what does this entail?

The concepts of „imposing competition-restricting conditions or encouraging impediments“ cover all actions and measures of an association of undertakings intended to encourage its member undertakings to behave in a certain way. The wording of the provision implies that a decision or encouragement can be in any form.

The use of the term 'incitement' in Article 12 of the Competition Act suggests that the legislature intended to place particular emphasis on the provision covering any non-binding measures of an association of undertakings that are aimed at distorting competition or having such a detrimental effect. The term 'incentive' thus covers all actions and measures of an association of undertakings intended to encourage its member undertakings to behave in a certain way.

It is clear that the provision of Article 12 constitutes an independent infringement of competition law, but its substantive content is also reflected in the prohibition of unlawful collusion in Article 10 of the Competition Act. Article 12 is comparable to the rules that apply elsewhere in the European Economic Area and has been interpreted in decisions, rulings and judgments.

Article 12(2) of the Competition Act then makes it clear that the prohibition on deciding on restraints of competition or encouraging barriers also includes „members of the organisation's board, its employees and persons appointed to positions of trust for the benefit of the organisation“. In the bill that became the previous Competition Act, this was stated, among other things, regarding the provision: „In order to prevent any doubt about the interpretation, it is specified in paragraph 2 that the ban also applies to the directors of an association, its employees, and persons holding positions of trust within or on behalf of an association of undertakings.“

The Competition Authority has issued guidance on what business associations need to avoid in particular. It has been published on the authority's website and in a report. No. 1/2008, Commercial contracts of suppliers and other cooperation between companies in the food market, (pp. 30 onwards). These guidelines are based on discussion and case law, both domestically and internationally, but the report emphasises that this discussion is not exhaustive.

The following are examples of coverage or cooperation which may contravene Article 12, in relation to Article 10 of the Competition Act:

• A decision or other consideration regarding a fee schedule or what constitutes „reasonable“ pricing by member associations.
• Decisions or other consideration regarding raising prices, lowering prices or keeping prices unchanged.
• Coordination of or other handling of any kind of terms and conditions of business applicable to the customers of the member companies.
• Coverage or discussion about member companies not doing business with certain parties.
• Reporting or discussion of prices, price trends, terms of trade, and price changes in inputs and other cost items.
• Reporting or discussion of the operational, financial and commercial position of competitors or clients of the member associations.
• Exchange or dissemination of information on prices, costs or cost structures, cost increases, customers, supply and sales terms and conditions.
• Official comment regarding the pricing or services of member companies. This includes, among other things, public discussion about the prices and price changes of member companies.

As set out in the answer to question 2 above, the following conduct on a platform or on behalf of an association of undertakings may contravene Article 12, insofar as it relates to Article 10, of the Competition Act:

• „Reporting or discussion of prices, price trends, terms of trade, and price changes in inputs and other cost items.“
• „Coverage or discussion of the operational, financial or commercial position of competitors or clients of member associations.“

Spokespeople for business organisations therefore need to be familiar with the competition law rules concerning the activities of interest groups, collusion and more. They must, among other things, be aware that comments on prices and price increases can be interpreted as indications, messages or encouragement that it is timely to raise prices.

It must be borne in mind that the members of business associations are often all, or most, of the companies in the relevant industry or industries, and the representatives of such associations then speak on behalf of the entire sector. It is obvious that their statements can have a significant impact on businesses. For this reason, the provisions of Article 12 of the Competition Act are of great significance.

Thus, the representatives of a business association must ensure that its member companies cannot regard its discussions as an indication that price changes are now timely. It is important that the member companies make decisions about price changes, as well as other decisions regarding their operations, independently.

The work of business interest groups can be beneficial and have a positive impact on markets. To carry out this work, interest groups are permitted to participate in general media discussion about the relevant industry for educational and informational purposes. They are also permitted to engage in various forms of lobbying. This may, for example, apply in the following cases:

• Lobbying government regarding new or amended legislation, the imposition of taxes, or other government policies that could affect the relevant industry.
• In a discussion of working environment or working conditions, e.g. with regard to safety requirements and environmental considerations, provided that it does not involve consultation on market access barriers that would have a detrimental effect on competition.
• In a discussion on ways to enhance the competitiveness of the relevant industry, innovation, research or education.
• In a government forum discussing ways to improve business conditions, their input into the discussion on the state of the economy can be important.
• By providing services or consultancy to member companies, such as legal advice, on the audit of accounts, staff training or environmental considerations.

It should be borne in mind that in individual cases, business associations may have committed to following specific rules to ensure a change in conduct that has been deemed unlawful.

As regards the discussion by business associations or their representatives, it is clear that the provisions of competition law do not preclude discussion of economic matters, shortages of goods, interest rate increases and other business conditions. Thus, trade associations can in various ways facilitate discussion about the operating conditions of businesses, provided that member companies cannot regard the association's discussions as an indication, message or encouragement to engage in specific conduct or actions.

In discussions about the operating conditions for businesses, spokespeople for trade associations often have more than one option. For example, there is a difference between, on the one hand, a business association or its spokesperson stepping forward and predicting that companies will raise prices, and, on the other hand, commenting on the necessity of doing so, and on the other hand, a spokesperson analysing rising raw material prices and worsening conditions, but at the same time stating that it is up to the companies themselves to find ways to respond, e.g. through cost-cutting measures or changes to terms and conditions.

The first option is problematic and could contravene competition law, as the association's member companies may take the comments as an indication that it is now an opportunity to consider price increases, regardless of the individual company's circumstances. The second option does not contain such indications and is therefore acceptable.

If the actions or conduct of an association of undertakings fulfil all the conditions of paragraph 1 of Article 15 of the Competition Act, the prohibition in Article 12 of the Act shall not apply. Business associations are themselves responsible for assessing whether the relevant cooperation or activities meet those conditions and whether their activities in general comply with the requirements of competition law. The Competition Authority has issued specific Guidelines on exemptions under Article 15 of the Competition Act.

It is unlikely that the minor offences rule of competition law can apply in the case of an association of undertakings, where a large number of undertakings in the same sector are usually members of such an association and the association's actions therefore have a wide-ranging impact. The minor offences rule of section 13 of the Competition Act covers cooperation where the combined market share of the undertakings concerned is below 5-10%. The same applies to the application of block exemptions, where the combined market share of the undertakings concerned must be below 30%.

The application of this provision has been discussed in various decisions of the supervisory authority. Similarly, competition authorities in this country have made decisions in around twenty cases where business associations have been found to contravene Article 12 of the Competition Act through discussions of prices or other anti-competitive barriers.

These cases provide important guidance on how interest groups can conduct their activities, and how not to.

For this purpose, it is appropriate to mention the following cases. The decision and the news report concerning the case can be accessed via the attached link:

1. Decision No. 7/2022, Breach by the Association of Financial Institutions of Article 12 of the Competition Act and the provisions of Decision No. 17/2004. The Association of Financial Institutions (SFF) reached a settlement with the Competition Authority, in which the association admitted to having breached Article 12, cf. Article 10 of the Competition Act No. 44/2005 and against paragraph 4 of the dispositive wording of Decision No. 17/2004, which prohibits the association from exercising public authority regarding the pricing and services of its member companies.In summary, the infringements consisted of SFF acting as a public authority in relation to the pricing and services of its member companies operating in the insurance market. This consisted of communications on the SFF platform and articles written by the association which were published publicly on 25 May 2021 and 8 September 2021. The SFF undertook to pay an administrative fine for the aforementioned breaches in the amount of twenty million króna. The Competition Authority's press release on the decision from 28 March 2022.
2. Decision No. 43/2017, Measures to improve competition in estate agency. The estate agents' association reached a settlement with the supervisory authority and acknowledged that it had orchestrated discussions about sales commissions and the collection of administration fees among estate agents, and had encouraged member companies to advertise properties exclusively on the association's website. The association committed to making changes to its operations and implementing, among other things, a competition compliance programme. The association paid a fine in connection with the case.
3. Decision No. 24/2015, Measures to strengthen competition in the tourism sector. The Tourism Association (SAF) reached a settlement with the regulator and admitted to, among other things, collecting and sharing price information, promoting standardised terms and issuing guidelines on various fees. The association committed to making changes to its operations, implementing a competition compliance programme and taking detailed measures as described in the decision's terms. The conditions include, among other things, a public undertaking. The association paid a fine in relation to the case. The association is part of the Federation of Icelandic Industries.
4. Decision No. 30/2012, Breach by Jeppavina and the association's member companies of Articles 10 and 12 of the Competition Act. It was a trade association of commercial jeep owners. The association reached a settlement with the regulator and admitted to breaching competition law by publishing recommended price lists, coordinating commercial terms and communicating about pricing. The association committed to ensuring the commercial independence of its members, in addition to existing legal requirements. The association paid a fine in relation to the case.
5. Decision No. 27/2010, Breach by the Association of Employers in the Electrical and Computer Industry of Article 12, in relation to Article 10, of the Competition Act. The association reached a settlement with the regulator and admitted to having banned its member companies from doing business with certain companies, and that this boycott was based on the association's rules of conduct. The association also acknowledged that other provisions of the code of conduct concerning information exchange and cooperation constituted a breach of competition law. The association undertook to repeal certain provisions of its rules of conduct, to withdraw its bans, and to make changes to its operations to ensure a recurrence of the infringements. The association paid a fine in relation to the case.The Association of Employers in the Electrical and Computer Industry joined the Federation of Icelandic Industries after the aforementioned decision was taken, but had previously been a member of the Confederation of Icelandic Business. The Federation of Icelandic Industries is a member of the Confederation of Icelandic Business.
6. Decision No. 9/2009, The Agricultural Association of Iceland's breach of the competition law ban on price-fixing. It was concluded that the association had breached Article 12, in conjunction with Article 10 of the Competition Act, by promoting price increases for agricultural produce. The infringement consisted, among other things, of encouragement by the chairman of the BÍ in the media and at the Agricultural Congress. The infringement concerned products subject to free price competition, particularly chicken meat, and not products where the government was involved in pricing. Provisions were made for changes to the operations of the BÍ to prevent similar infringements. In a ruling in case no. 7/2009, the appeals board confirmed the organisation's infringement, but reduced the fines.
7. Decision No. 5/2009, Breach by the Association of Icelandic Wholesalers of Article 12, cf. Article 10 of the Competition Act. The association reached a settlement with the regulator and admitted to breaching competition law through discussions within the association about pricing matters of its member companies operating in the food sector. Similarly, the association admitted that a former director's public comments about the need for price increases had constituted an infringement. There were also communications with the Confederation of Trade and Service, in which the associations agreed to speak with one voice on the reasons for price increases. The association committed to having in place procedures designed to prevent similar breaches. The association paid a fine in connection with the case. The Association of Icelandic Wholesalers is now called the Association of Business Operators.
8. Decision No. 10/2008, Breach by the Federation of Industry and the Federation of Trade and Services of competition law in connection with the reduction of value-added tax on food products. The associations reached a settlement with the authority and acknowledged an infringement of Article 12, in light of Article 10 of the Competition Act, which consisted of co-operation on how companies should handle price changes resulting from a reduction in public charges. Furthermore, it was decided how the loss of revenue would be shared. The unlawful measures included, amongst other things, the public announcement of plans. The associations committed to establishing rules to ensure that their activities would always comply with competition law. Both associations paid the government fine. Both associations are members of the Business Council.
9. Decision No. 4/2008, Breach by Greiðslumiðlun hf., Kreditkort hf. and Fjölgreiðslumiðlun hf. of the prohibition provisions of the Competition Act. The companies reached a settlement with the authority and admitted to extensive breaches of the prohibition on illegal collusion, in addition to which Greiðslumiðlun (now Valitor) admitted to a breach of the prohibition on abuse of a dominant position. Furthermore, Fjölgreiðslumiðlun admitted an infringement of Article 12, in relation to Article 10 of the Competition Act, as the company was jointly owned by banks and payment card companies and was considered an association of undertakings within the meaning of the Act. The companies all paid the administrative fines imposed in the case and submitted to detailed conditions which included changes to the payment card market.
10. Decision No. 17/2004, An investigation into anti-competitive cooperation in the Icelandic insurance market. The Association of Icelandic Insurance Companies (SÍT) reached a settlement with the competition authorities, in which it was acknowledged that the association had breached Article 12, i.e. Article 10 of the Competition Act, through various measures, including acting as a public spokesperson for the pricing and services of its member companies. The association committed to various measures to prevent similar infringements. This included a prohibition on the association taking a public stance on pricing and other matters, in order to reinforce existing legal provisions. SÍT later became part of the Financial Institutions Association (SFF), and the association is a member of the Confederation of Icelandic Enterprise.
11. Decision No. 5/2004, Illegal collusion within the Icelandic Bar Association. It was concluded that the Bar Association had encouraged an increase and harmonisation of lawyers' fees by having a cost basis negotiated and published. The association paid an administrative fine in relation to the matter.

The Competition Authority has on several occasions applied Article 12 of the Competition Act, see e.g. in Decision No. 8/2015, Changes to the structure and operation of the payment card market. The case concerned, among other things, the decision on a common interchange fee in card transactions, which was made by Valitor and Borgun on behalf of the commercial banks. The card companies were jointly owned by the banks and were considered an association of undertakings within the meaning of competition law. The companies all entered into settlements with the authority, admitted infringements, including of Article 12 of the Competition Act, and paid fines. The companies also committed to taking measures to improve the competitive conditions in the payment card market, including by reducing interchange fees.

The supervision of business associations is primarily concerned with whether Article 12, in light of Article 10 of the Competition Act, is complied with, and whether the associations adhere to the conditions or rules to which they have committed themselves in specific cases.

The Competition Authority's website publishes information on all interventions against business associations. As set out in the answer to question 6, in a number of cases business associations have committed to making changes to their activities, such as adopting a competition compliance programme or procedures, in order to ensure compliance with the law.

The Competition Authority's supervision and enforcement are carried out in particular in the following ways:

• The Competition Authority receives complaints, enquiries and suggestions from consumers or businesses in the market and decides whether there is cause for an investigation based on them.
• The supervisory authority monitors media coverage and other information that may indicate potential matters for investigation.
• When there is cause, the supervisory authority issues notifications which set out recommendations. Thus, the supervisory authority issued Notice on Friday, 22 October 2021, which drew attention to the existing rules on the activities of interest groups and their coverage of price increases. Similar recommendations were made in notification at the end of March 2008, where the duties of companies and their associations were emphasised.
• The Competition Authority then fulfils an advisory role by providing information on its website and in public debate, e.g. Article no. 9/2021 and in formal and informal communications with interest groups and member companies.
• When necessary, the Competition Authority intervenes, see, for example, the cases referred to in the answer to question 6. Under investigation may be breaches of Article 12, in relation to Article 10 of the Competition Act, or breaches of the Authority's previous decisions.

In Iceland, there is a lack of competition in various important markets. This was stated in the Supreme Court's judgment of 7 January 2021 in case no. 42/2019: „Oligopolistic markets are particularly vulnerable to any form of co-operation between competitors, as it is easier to engage in consultation or anti-competitive coordination in such circumstances, and there is therefore all the more reason to safeguard the independent decision-making of competitors and such copenness which can prevail in the market despite the oligopoly […].“ In a judgment of the Supreme Court of Iceland dated 1 December 2016 in case no. 360/2015, it is stated that it is important in an oligopolistic market that there is uncertainty among the companies. „concerning the conduct of competitors“.

It is therefore particularly urgent that Icelandic business associations fully understand the constraints that competition law places on their activities and actively ensure that their operations do not result in any form of barrier to competition. At the same time, it is important that representatives of business associations do not take any actions that unduly reduce the desirable uncertainty in the market and the independent decision-making of member companies that compete in the market.

It is also useful to bear in mind that it is recognised that effective competition increases consumer welfare and promotes efficiency in business. Lower prices, increased quality, greater efficiency, better management, increased innovation, less inequality, lower unemployment, a faster recovery during recessions, a more dynamic economy and increased competitiveness are all consequences of effective competition.

The benefits of effective competition are therefore considerable. In a report by the Competition Authority No. 1/2021, The positive effects of competition on living standards and prosperity, Research on the effects of competition in various fields is compiled.

Similar rules apply to business interest groups in the European Economic Area and elsewhere. This entails a ban on anti-competitive practices and the encouragement of barriers. Likewise, the prohibition on illegal collusion is of the same nature and is widespread throughout the world.

Competition authorities in neighbouring countries follow these rules, as does the Competition Authority here in the country. For example, one can cite the investigation by the Irish competition authorities, which was directed at insurance companies and their associations, as reported on Homepage of the Irish regulator on 20 August 2021. In a statement on the matter, it says, among other things:

„The CCPC opened this investigation following public statements made by a number of parties in the sector which appeared to confidently forecast that premiums would rise. At the time, consumers were reporting increases in their premiums and the CCPC was concerned that these statements could be considered price-signalling and, along with other communications about pricing, a breach of competition law.“

Neither trade unions, the Central Bank, nor the analysis departments of banks are bound by Article 12 of the Competition Act.

Business associations stand apart from the group mentioned here, because the members of a business association are often all, or most, of the companies in the relevant industry or industries, and the representatives of such associations then speak on behalf of the entire industry. Clearly, their statements can have a significant impact among businesses. For this reason, the provisions of Article 12 of the Competition Act are of great importance.

Some pointers that are useful to bear in mind can be summarised:

1. Interest groups should adopt a publicly disclosed competition law programme, which should include procedures in their operations to counter the risk of competition law infringements. Several organisations have committed to adopting rules of this kind.
2. It must be regularly emphasised to all who participate in the organisation's activities that any discussion of competitively sensitive matters is prohibited. Furthermore, it is important that member companies are clearly informed that breaches of competition law are not tolerated within the organisation.
3. It is useful to establish procedures for member companies, including how their directors and employees should respond if competitively sensitive matters are discussed among competitors. The principle should be to leave the meeting/conversation, make accurate notes and report any potential breaches.
4. Procedural rules should be established for the organisation's representatives regarding their participation in public debate, to facilitate legitimate advocacy and prevent accidents.

Trade associations must not participate in price discussions | News | The Competition Authority

Business interest groups' discussion of pricing – Competition law rules | Articles | The Competition Authority

Price increases – public discussion by competitors and their trade associations may contravene competition law | News | The Competition Authority

In 2007, the criminal liability of individuals for breaches of competition law was further defined. The amendments made the criminal liability of individuals clearer and provided for more detailed provisions on division of labour and cooperation between the competition authorities and the police in the investigation of offences against competition law.

The criminal liability of individuals for breaches of competition law is limited to offences involving illegal agreements, which are considered the most serious breaches of competition law. The reason for this is that in cases where collusion is suspected, significant interests of consumers and business are at stake, as illegal collusion between companies can result in serious economic harm. Under the current competition law, an individual, i.e. an employee or director of a company, who carries out, encourages or has carried out concerted action, may be subject to fines or imprisonment for up to six years. Specifically, the criminal liability covers collusion on prices, discounts, surcharges or other commercial terms, collusion on the division of markets and the restriction of production, collusion on the making of offers, collusion to refrain from dealing with certain companies or customers, and the provision of information on these specific matters. It also includes collusion between companies that aims to prevent them from competing with each other.

Abuse of a dominant position cannot be penalised in the same way for individuals. The explanatory memorandum to the bill stated:

It is a fact that the abuse of a dominant position, pursuant to Article 11 of the Competition Act, can cause significant damage to society, and there are grounds for arguing that such abuse should be punishable in the same way as illegal collusion. However, it is considered that the application of such a penal provision could be problematic, as it may be necessary to carry out a complex economic analysis to determine whether the company in question holds a dominant position. Furthermore, in exceptional cases, it may be difficult for a company to determine whether it holds a dominant position within the meaning of Article 11 of the Competition Act. Furthermore, it should be borne in mind that Article 11 of the Act prohibits conduct that may be normal and even pro-competitive where a company is not in a dominant position. On this basis, there is no reason to impose a penalty for the abuse of a dominant position. The conclusion is consistent with the competition law of most Western countries, which provides for penalties for competition offences, e.g. the United Kingdom, Norway and the United States.

Individuals who commit competition law infringements are only subject to a public investigation following a complaint by the Competition Authority to the police. The Competition Authority assesses on a case-by-case basis, taking into account the gravity of the infringement, whether to refer a case to the police. It is important that the Competition Authority maintains consistency in the handling of comparable cases. It should also be noted that the Competition Authority may decide not to prosecute an individual if he or the company he works for has taken the initiative to provide the Competition Authority with information or evidence concerning infringement of competition law which can lead to the proof of the infringements or is considered a significant contribution to the evidence already in the possession of the Competition Authority.

The Competition Authority is authorised to hand over to the police authorities any data and information it has obtained relating to the alleged infringements under investigation. Likewise, the police may hand over to the Competition Authority any data and information that is relevant. Furthermore, the Competition Authority is authorised to participate in police operations concerning the investigation, and the police are likewise authorised to participate in the operations of the competition authorities.

Yes. It is possible to be a party to an illegal agreement even if others handle its implementation, and it is also possible to be a party to an agreement where no one does anything, i.e. an agreement on inaction. The prohibition of unlawful collusion under competition law does not only cover direct actions, but also agreements concerning actions or inactions.

It is best to provide an example in this answer:

Representatives of three companies are sitting in a meeting. Representatives of two companies conspire to establish an illegal cartel involving all three companies. The cartel is planned and launched, without the direct participation of the third representative. Nevertheless, he would be considered a party to the collusion because he was present at the meeting where the collusion was established and planned, and was thus fully aware of it.

To not be considered a party to the consultation, the third representative would have had to make it very clear that they would not be taking part in the consultation. Even by taking their glass of water and spilling it to draw attention to their point.

Article 12 of the Competition Act states that associations of undertakings are prohibited from deciding on restraints of competition or encouraging barriers which are prohibited under the Act. Legislative history states that the provision emphasises that both associations of undertakings and the undertakings themselves are prohibited from establishing or encouraging barriers that contravene the prohibitions in the Act. It is clear from this that an infringement of Article 12 constitutes a standalone infringement of competition law, even though the substantive content of the provision is to some extent set out in other provisions of the competition law, such as Article 10.

A decision of an association of undertakings, within the meaning of competition law, refers to any binding or non-binding decision or recommendation which the association issues to its member undertakings in such a way that it is capable of affecting the commercial conduct of the members. No formal requirements apply to these decisions by associations of undertakings. The use of the term 'incitement' in Article 12 of the Competition Act indicates that the legislature intended to place particular emphasis on the provision covering any non-binding measures by business associations that are aimed at distorting competition. The term 'incitement' in Article 12 of the Competition Act thus covers all actions and measures by business associations intended to encourage member undertakings to behave in a certain way. The wording of the provision implies that such an incitement can be in any form whatsoever. It follows that various actions by business associations, such as guidelines, recommendations or the provision of information, can fall within the scope of Article 12 of the Competition Act if these actions are intended to, or have the effect of, preventing or distorting competition.

It must also be borne in mind that, in the context of business associations, a risk arises of information exchange which may contravene the prohibition in Article 10 of the Competition Act, even if this is not the intention. Article 10 of the Competition Act strictly prohibits all collusion between competitors, as well as concerted practices between them. This means that any collusion between competitors in the market regarding prices, discounts, terms of trade, market sharing, production or other business matters is prohibited. Collusion can include any form of communication between the employees of competitors, whether the communication is one-way or two-way.

The amount of fines depends on the nature and extent of the offence, how long the offence has been ongoing, and whether it is a repeat offence. Other factors may also be taken into account, such as the size of the infringing company, the mindset of its management and profit considerations. Fines can amount to up to 10% of the infringing company's annual turnover. It should be borne in mind that business associations are also fined for competition law infringements. In the case of associations, the fine is determined based on the turnover of the association itself or the turnover of each of its members who is active in the market concerned by the association's infringement.

There is no requirement that a company must be run for a profit for fines to be imposed for a breach of competition law. However, it is clear that the imposition of fines takes into account each individual case as well as the general objective of deterrence. In the context of competition law, fines should therefore contribute to the enforcement of competition legislation and thereby increase competition. As provided for in competition law, a decision to impose a fine may be waived if the infringement is considered minor or if, for other reasons, a fine is not considered necessary to contribute to and strengthen effective competition.

Whether or not companies are run at a profit is not, in itself, a decisive factor when it comes to assessing whether and to what extent a company in breach should be fined.

Rules on the waiver or reduction of fines apply exclusively to infringements concerning illegal collusion. An undertaking that is a participant in an illegal collusion or an illegal concerted practice may have fines that would otherwise have been imposed on it waived or reduced. To be eligible for a full waiver of fines, a company must either be the first to alert the Competition Authority to an infringement and provide evidence that leads to the Authority opening an investigation into the relevant infringement, or be the first to provide the Competition Authority with evidence that leads to the Authority opening an investigation into the relevant infringement, and subsequently cooperate with the Authority's investigation.s or be the first to voluntarily provide the Competition Authority with evidence that enables it to prove such an infringement. A company cannot have fines fully waived unless it shows full co-operation and provides all relevant evidence and information in its possession concerning the infringement. Furthermore, the company in question must cease its participation in the infringement and must not have coerced other companies into participating in the illegal collusion.

In this context, it is crucial that the company in question is first to the table, that is to say, the first to alert the Competition Authority to the existence of an illegal cartel or the first to provide evidence that enables the Authority to prove such a cartel. Fines will not be fully waived unless the Competition Authority did not previously have sufficient evidence to initiate an investigation or to prove an infringement.

Other than as set out above, a company may have fines reduced if it submits evidence that constitutes a significant addition to the evidence already in the Competition Authority's possession. It is in a company's best interest to be the first to submit evidence that constitutes a significant addition, as the company that does so will receive the largest proportional reduction. If more companies come forward later and submit data to the Competition Authority that qualifies as a significant addition, the proportional reduction they can receive on their fine is lower than that of the company that came before them. The company that comes next receives a smaller reduction than the first one, and so on.

When assessing which data constitutes material evidence, consideration is given to the extent to which the data helps to establish the facts of the case, taking into account the nature and accuracy of the data. Generally, written evidence that originates at the time the wrongdoing occurs is of greater value than evidence that comes into existence later. Furthermore, direct evidence is more significant than circumstantial evidence.

The Competition Authority's rules on the remission and reduction of fines are numbered. 890/2005 and can be accessed here.

One of the fundamental principles of competition law is the prohibition on price-fixing between companies. Illegal price-fixing occurs when companies enter into an agreement or, through concerted practices, follow a common plan that restricts, or is likely to restrict, their independent conduct in the market. This means that companies must independently decide, each for themselves, how they intend to behave in the market. However, this requirement for independence does not prohibit companies from taking action in response to the behaviour of their competitors in the market. It does, however, prohibit any form of communication between competitors, direct or indirect, which has or is likely to have the effect of reducing or distorting competition between them. For example, companies commit an offence of unlawful collusion if, in a meeting, telephone conversation, letter, email or otherwise, they hold discussions or exchange or receive information about matters relevant to the determination of prices. The mere fact that competitors in a market price their products similarly or in the same way, and follow each other in price changes, is therefore not in itself sufficient to demonstrate that an illegal price-fixing agreement is in place.

Accordingly, for there to be an illegal price-fixing, it is a condition that the companies in question have had some form of direct or indirect communication with each other. It may, of course, be difficult in individual cases to distinguish between, on the one hand, concerted practices of undertakings, in which they consciously participate in order to restrict competition, and, on the other hand, situations where undertakings behave in the same or a similar manner on the market as a result of competition. An example of the latter is a duopoly, where companies in, for example, a transparent market are constantly mindful of how their competitors will react to a particular market action, such as a price reduction. However, an examination of the market and market conditions should usually be able to reveal whether coordinated actions are taking place. Under certain circumstances, similar behaviour by competitors in the market can be an indication of illegal collusion.

In short, the answer is yes; all business-to-business collusion that distorts competition is prohibited. It is a fundamental principle of competition law that companies in competitive markets should act independently on all matters on which they compete. These include, for example, decisions on product range, service offerings and pricing.

It does not matter how the collusion takes place, i.e. whether representatives of the companies meet in meetings, correspond with each other, sign formal agreements or agree on market behaviour in any other way. Nor does it matter whether these agreements or communications are binding or merely indicative. What matters when assessing whether it constitutes illegal collusion is whether the objective or the effect of the conduct is to restrict or distort competition.

Business associations, the directors of such associations, their employees and persons chosen for positions of trust on behalf of the associations are also prohibited from participating in consultations.

However, competition law recognises that collusion between companies with a small market share has a minor impact on the competitive market and may even improve the competitive position of small companies against larger competitors. Therefore, competition law contains the so-called „block exemption regulation“, which provides that horizontal agreements (i.e. agreements between undertakings operating at the same level of production or distribution, e.g.e.g. agreements solely between retailers) are exempt from the prohibition on collusion, provided the combined market share of all the undertakings involved does not exceed 51% in any relevant market. For vertical agreements (i.e. agreements between undertakings operating at different levels of production or distribution, e.g. agreements between retailers only) the threshold is that undertakings with a market share of up to 10% can restrict competition without infringing the prohibition on restrictive practices.e.g. agreements between wholesalers and retailers) it is assumed that companies with up to 10% market share can consult without infringing competition law.

It is also recognised in competition law that sometimes cooperation between companies can have positive consequences, for example if it promotes greater rationalisation, efficiency or fosters technological progress and/or improved production of a product. For such cooperation to be permitted, its positive effects must outweigh the negative ones. In such cases, the collaborating companies must assess whether the collaboration fulfils the conditions of Article 15(1) of the Competition Act to be exempt from the Act's prohibition on illegal collusion. The Competition Authority has issued Instructions which is intended to assist companies with this assessment. Also, so-called Group exemptions you mean.

Competition law prohibits any form of anti-competitive cooperation between two or more undertakings. Collusion between competitors is considered one of the most serious infringements of competition law, as competitors are expected to act entirely independently in the market.

Illegal collusion between companies can be both vertical, i.e. collusion between companies at different stages of the supply chain, e.g. between a wholesaler and a retailer, or horizontal, which consists of illegal cooperation between companies at the same level of trade, e.g. between two retailers. Examples of the main types of illegal collusion include:

• Price-fixing which may include, amongst other things, an agreement to influence prices, discounts, surcharges or other commercial terms. This does not only apply to the final purchase or sale price but may also apply to an agreement on, for example, minimum prices and reference prices.
• Market segmentation which can, for example, involve competitors agreeing to divide up markets by, for instance, customers, product types or geographical areas.
• Limitation on production/supply which can, for example, involve competitors agreeing to produce or sell only a certain quantity of a product with the aim of raising its price.
• Consultation on the submission of bids which can include, for example, competitors agreeing not to participate in a particular tender, deciding to submit a bid with the same prices, or deciding amongst themselves who is to be awarded the contract under the tender.
• Information exchange between competitors which may, for example, consist of competitors exchanging information that is intended to, or is likely to, influence their behaviour in the market and thereby reduce uncertainty about how the competitor intends to behave in the market.
• Measures that hinder the entry of new competitors into the market.

The types of collusion listed above share the common aim of raising the prices of goods and services to the detriment of consumers. Corporate collusion can therefore have a very damaging effect on competition and worsen the terms on which the general public are offered goods and services.

The Competition Authority has made numerous decisions in which companies have been fined for participating in illegal collusion, but the Competition Authority can impose heavy fines on companies that take part in such infringements, and the fines can amount to up to 10% of the totalturnover of the relevant company or group of companies. In addition, directors of companies involved in illegal collusion may face a prison sentence of up to six years.

As is widely known, any form of anti-competitive cooperation between companies is prohibited under competition law. This is often referred to as illegal collusion between competitors. It can involve illegal collusion regarding, for example, the price of a product or service, the making of tenders when procurement or projects are put out to tender, and the division of markets between companies. Competition-restricting illegal collusion is the most serious infringement of competition law, and all collusion cases are therefore inherently important in the view of the Competition Authority.

Nevertheless, of course, some matters are more important than others. The so-called oil matters, or oil consultation, can probably be considered among the most important and extensive of all the consultation matters that the competition authorities in this country have disclosed, see decision. No. 21/2004 Illegal collusion by Kers hf. (formerly Olíufélagið hf.), Olíuverslunar Íslands hf., Skeljungs hf. and Bensínorkunnar ehf. This included, amongst other things, collusion on prices, mark-ups, the making of tenders and market sharing. Another significant cartel case is the dismantling of an illegal cartel by companies in the vegetable market, see decision No. 13/2001, which included, among other things, price-fixing and market-sharing by distribution companies. Then there is the very serious collusion between companies in the payment card market, see decision No. 4/2008. Finally, reference should be made to a recent case where the companies Tæknivörur and Hátækni had an illegal agreement on the wholesale market for mobile phones, a decision No. 7/2013.