A merger for the purposes of competition law is considered to have taken place when there is a lasting change in control in the following four cases:
The takeover of one company by another, or a merger of companies, can lead to a reduction in existing competition, or it can even disappear completely. This can result in the creation of a company with a dominant market position, or even a monopoly. This can harm consumers through higher prices, a smaller choice of products and less innovation. By monitoring corporate mergers, it is possible to prevent harmful effects on competition.
Merger rules are therefore one of the cornerstones of competition law and play an important role in preventing the competitive structure of markets from being altered, through mergers or acquisitions, in a way that eliminates or restricts competition.
The merger notification obligation becomes effective when the combined turnover of the undertakings concerned is ISK 3 billion or more in Iceland, and at least two of the undertakings involved in the merger each have an annual turnover of at least ISK 300 million in Iceland.
However, the Competition Authority is authorised to require notification of mergers that do not meet these conditions if the authority believes that they could significantly reduce effective competition and if the combined turnover of the companies concerned is greater than 1.5 billion króna. per year.
It is then permitted to notify a merger with a short notice if at least one of the conditions set out in points a to e of paragraph 6 of Article 17a is met. competition law, such as where the markets in which the effects of the merger are felt are not connected.
A merger must be notified before it is implemented, but after an agreement for it has been made. A takeover bid or acquisition of control of an undertaking is publicly announced. A merger that falls under the provisions of competition law must not be implemented while the competition authority is reviewing it.
Samkeppniseftirlitið hefur 25 virka daga til athugunar á samkeppnislegum áhrifum samruna eftir að tilkynnt hefur verið um hann. Telji Samkeppniseftirlitið ástæðu til frekari rannsóknar á samkeppnislegum áhrifum samruna skal stofnunin tilkynna samrunaaðilum um það. Ákvörðun Samkeppniseftirlitsins um ógildingu eða setningu skilyrða samruna skal taka eigi síðar en 90 virkum dögum eftir að viðkomandi fyrirtækjum var send tilkynning um frekari rannsókn á samrunanum. Við ákveðna aðstæður
framlengist þessi frestur.
The merger must not be implemented while such an investigation is ongoing.
Það er almennt talið að samrunar smærri fyrirtækja séu ekki skaðlegir samkeppni. Þess vegna er samkvæmt samkeppnislögum aðeins skylt að tilkynna Samkeppniseftirlitinu um samruna þegar sameiginleg ársvelta þeirra fyrirtækja sem renna eiga saman er þrír milljarðar króna eða meira á Íslandi. Einnig þarf það skilyrði fyrir tilkynningaskyldu að vera uppfyllt að a.m.k. tvö af þeim fyrirtækjum sem aðild eiga að samruna séu, hvert um sig, með að lágmarki 300 m.kr. ársveltu á Íslandi. Þrátt fyrir þessi almennu veltuskilyrði hefur Samkeppniseftirlitið heimild til að krefjast tilkynningar um samruna ef sameiginleg heildarvelta samrunafyrirtækja er meira en 1,5 milljarður króna. Samkeppniseftirlitið beitir þessari heimild þó aðeins í undantekningartilvikum, þ.e. þegar eftirlitið telur að samruni sem ekki uppfyllir hin almennu veltuskilyrði geti dregið úr virkri samkeppni.
The merger of companies operating in the same competitive market, a so-called horizontal merger, can be detrimental to competition in that market. The merger reduces the number of competitors in the relevant market by at least one, which can be problematic in Iceland where there are many so-called oligopolistic markets. Examples of oligopolistic markets in Iceland include the aviation market, the market for scheduled freight services, and the oil market. A merger can, in such circumstances, lead to the merged company attaining a dominant market position or strengthen a dominant position that existed prior to the merger. In cases where a merger is considered to be harmful to competition, the Competition Authority can annul the merger or impose conditions intended to remedy the harm.
Finally, it should be noted that the merger of smaller companies in a particular market can sometimes be desirable and lead to more effective competition in the market. Through the merger, the combined companies can provide larger competitors in the relevant market with greater and stronger competitive pressure than they could individually.
The merger notification shall provide information on the merger, the undertakings involved, the relevant markets and any other necessary matters for the assessment of the merger's effects on competition. In Annex I to the Competition Authority's rules nr 1390/2020, um tilkynningu og málsmeðferð í samrunamálum, sem aðgengilegar eru á heimasíðu þess, eru nánar tilgreindar þær upplýsingar sem fram verða að koma í tilkynningu.
A shorter notice is permitted if one of the conditions from a to e of paragraph 6 of article 17a is met. competition law, for example, if the markets in which the effects of the merger could be felt are not related. In such cases, it is not necessary to provide as extensive information as for a standard merger notification, and an exhaustive list of the information to be included with a short notification can be found in Annex II of the Competition Authority's regulations. No. 1390/2020 on notification and procedure in merger matters.
Article 17 of the Competition Act No. 44/2005 It deals with mergers of undertakings and the remedies available to competition authorities in this regard. The Competition Authority has the power to annul mergers if it considers that a merger hinders effective competition by creating or strengthening the dominant position of one or more undertakings. The Competition Authority's conclusions on the legality of mergers are based on information that the companies involved in the merger are required to submit. Pursuant to Article 17(3) of the Competition Act, the Authority has established rules No. 1390/2020 which specifies the information to be included in a merger notification. Such a notification shall contain the information, including documents, requested in the information schedule in the annex to the aforementioned rules. No. 1390/2020 The information must be accurate and sufficient. A list of the information that must be included in a notification to the Competition Authority about the merger of undertakings can be found here.
All notified mergers are investigated by the Competition Authority to determine whether they will significantly impede competition in the market, or whether a dominant position will be created or strengthened. If this is not the case, the mergers are approved without intervention from the Authority.
However, if the Competition Authority considers that a merger hinders effective competition by creating a dominant position or by strengthening an existing one, or otherwise significantly distort competition in the market, the competition authority may annul the merger or impose conditions on it.
Although the Competition Authority believes that a notified merger could have an adverse effect on competition, such a merger may be approved with conditions that prevent its harmful effects. The Competition Authority then monitors compliance with these conditions and can take action if they are not met.
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