Provisions of Article 10. competition law Prohibit any form of anti-competitive collaboration between companies. This may include, for example, the following types of company collusion:
All consultation between competitors in a market regarding prices, discounts, terms of trade, market sharing, production or other business matters is prohibited. Consultation may include any form of communication between employees of competitors, whether the communication is one-way or two-way. The same applies to communications between a manufacturer and a reseller, such as on binding resale prices for a product or service. The Competition Authority imposes fines on companies that take part in illegal collusion, and directors and employees of companies involved in the collusion may face criminal liability, such as fines and imprisonment.
Secret, illegal collusion between competitors is the most serious breach of competition law, as it can have very damaging effects on competition and thereby worsen the standard of living for the general public. Such collusion between companies almost invariably leads to higher prices than would otherwise be the case. Studies reported by the Organisation for Economic Co-operation and Development (OECD) show that the average profit for companies participating in illegal price-fixing amounts to 10% of the sale price of a product or service. The damage to society in such cases, however, is much greater and can amount to 20% of the value of the transactions covered by the collusion. More recent research suggests that the damage is even greater. In other words, buyers, i.e. consumers, businesses and the public sector, pay much higher prices for goods and services when competitors agree on prices, collude on bids or divide up markets, than when fair competition is allowed to prevail. Such collusion between companies therefore harms both the interests of business and consumers. Companies' inputs become more expensive and, in the long run, this reduces the competitiveness of industries, leading to a decrease in job opportunities.
Samkeppniseftirlitið getur lagt háar sektir á fyrirtæki sem taka þátt í ólögmætu samráði. Geta sektir numið allt að 10% af heildarveltu viðkomandi fyrirtækis eða fyrirtækjasamstæðu.
Companies that take or have taken part in illegal collusion can, under rules set by the Competition Authority, avoid fines or have potential fines reduced by co-operating with the Competition Authority in investigating the matter. These rules, which are modelled on foreign precedents, are intended to facilitate the Competition Authority's efforts to eradicate these serious infringements. It follows from the above that companies involved in an infringement can benefit greatly from this cooperation with the Authority. Further information about these rules and the conditions for this cooperation can be found here.
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