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 offences under investigation. Likewise, the police may hand over to the Competition Authority any data and information that may be 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 intent of its management and profit considerations. Fines can amount to up to 101% 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. Here it is possible to Read more about how fines are determined.
Rules on the waiver or reduction of fines apply exclusively to infringements concerning illegal collusion. A company that is a participant in illegal collusion or illegal concerted practices may have fines that would otherwise have been imposed on it waived or reduced. To be eligible for a full remission 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 infringement in question, or be the first to provide the Competition Authority with evidence that leads to the Authority opening an investigation into the infringement in question and that evidence also leads to the Authority opening an investigation into another company's infringement.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 demonstrates full cooperation and provides all relevant documents 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 could have the effect of reducing or distorting competition between them. For example, a company commits an offence of unlawful collusion if, in a meeting, telephone conversation, letter, email or otherwise, it holds discussions or exchanges or receives information about matters relevant to the determination of price. 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.
You can read more about illegal collusion. here.
In short, the answer is yes, all consultation.
It is prohibited for a company to distort competition. This is a fundamental principle of competition law.
that companies in competitive markets should act independently on all those matters
which are subject to competition. These include, for example, decisions on product range and service offerings.
and price.
It does not matter how the consultation should be
takes place, i.e. whether representatives of companies meet in meetings, correspond,
formally sign contracts or agree on market behaviour in any other way
high. Nor does it matter whether these agreements or interactions are
binding or only guidance. What matters when assessing whether it is
Whether the objective or consequences of the conduct are an illegal agreement.
restriction or distortion of competition.
Associations of companies, directors of such
organisations, their employees and persons elected to positions of trust on their behalf
The organisation is also prohibited from participating in consultation.
It is, however, recognised in competition law that
consultation between companies with a small market share has minor
impact on the competitive market and strengthening
even the competitive position of small businesses vis-à-vis larger competitors. Therefore, the Competition Act provides for so-called.
„a “minor rule' which involves that horizontal agreements (i.e. agreements between
enterprises operating at the same stage of production or sale, e.g. contracts between
(retail only) do not fall under the prohibition on collusion if the market share of all
partner companies do not exceed 5% in any relevant market. When it comes to
vertical agreements are concerned (i.e. agreements between companies operating in
different stages of production or sale, e.g. agreements between wholesalers and
retail) is based on the assumption that companies with up to a 10% market share can have
consultation without breaching competition law.
It is also recognised in competition law.
that sometimes collaboration between companies can have positive consequences, for example if
it contributes to increased optimisation, efficiency or promotes technological progress
and/or improve the production of a product. For such cooperation to be permitted, the following conditions must be met:
its positive effects outweigh the negative ones. The relevant partner companies
In such cases, it should be assessed whether the cooperation fulfils the conditions of 1.
Article 15 of the Competition Act to be exempt from the prohibition of the Competition Act against
illegal collusion. The Competition Authority
has issued Instructions which is intended to assist companies with this assessment. Also, so-called Group exemptions you mean.
Further information on the ban on illegal
Consultation can be found here.
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:
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 was 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.
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