A large proportion of executives at Icelandic companies believe they are witnessing breaches of competition law.

The Competition Authority is today publishing a report on the knowledge and attitudes of managers of Icelandic companies towards competition matters.
A large proportion of executives believe that anti-competitive behaviour is taking place in their market.
Most people believe that the Competition Authority plays an important role in promoting effective competition in Icelandic markets.

The Competition Authority publishes today Report no. 7/2024 , Knowledge and attitudes of managers in Icelandic companies towards competition issues. The report presents the results of a survey conducted by the Social Science Research Institute for the Competition Authority among managers of Icelandic companies in 2023. This was an online survey sent to the heads of Icelandic companies, and responses were received from a broad group of company managers from all sectors of Icelandic business life. The Competition Authority has previously commissioned a similar survey and reported its findings in Report No. 3/2020.

In the opinion of the Competition Authority, there is particular reason to take note of the following findings of the survey:

A large proportion of executives at Icelandic companies believe that competition law breaches are taking place in their market.

A little over a third (36%) of executives at Icelandic companies believe they have witnessed companies abusing a dominant market position, and 31% perceive collusion in the market in which their company operates, but such offences are prohibited by Article 11 of the Competition Act. and Article 10 of the Competition Act. Furthermore, 31% perceive that there are actions by public authorities that limit competition and 28% that there are anti-competitive laws, rules and regulations.

Competition law and its enforcement significantly reduce anti-competitive behaviour.

Competition law and the activities of the Competition Authority appear to have a significant impact on how Icelandic companies make their decisions. According to calculations based on the survey's findings, it can be estimated, for example, that between January 2019 and February 2023, the existence of competition law and the deterrent effect of the authority's active monitoring led companies to abandon conduct that would otherwise have been likely to cause significant harm.to 377 cartel cases (91 per year). Merger control legislation, and uncertainty as to whether certain merger plans were compatible with it, resulted in an estimated 49 restrictive mergers being abandoned during the period (12 per year).

The consequences of competition law infringements have a strong deterrent effect, but it is important to better publicise the reduction and exemption rules of competition law.

Criminal liability for individuals, negative media coverage and fines have the greatest effect in deterring companies from engaging in anti-competitive conduct, with 65-68% of respondents considering these factors to have a rather high or very high deterrent effect. The deterrent effect of competition law leniency schemes is low, with only 31% of respondents considering them to have a rather high or very high deterrent effect.

It is important to enhance the knowledge of managers of Icelandic companies on the core provisions of competition law and the EEA Agreement.

The knowledge of managers in Icelandic companies of the main provisions of competition law is limited. 23-24% are well acquainted with the provisions on the prohibition of abuse of a dominant position and concerted practice (Articles 11 and 10). Slightly fewer are familiar with the provisions on merger control and the conduct of public authorities (Articles 17 and 16), 17-18% are familiar with these provisions. These findings are comparable to the results of similar surveys among executives of Norwegian and Finnish companies.

Knowledge of European competition rules is even lower, with only 81% knowing them well compared to 63% who know them poorly.

Questions were also asked about knowledge of the leniency policy. 71% of respondents were unaware of the existence of such a policy.

Managers of Icelandic companies believe that the Competition Authority plays an important role in promoting effective competition in Icelandic markets and consider various ways to strengthen competition.

A majority of managers in Icelandic companies believe that the Competition Authority plays an important role, with 56% agreeing with this statement. Slightly fewer, 44-46%, agree that the competition law and its enforcement work against the abuse of a dominant position and collusion, and 28% agree that they influence the company's decisions on mergers and acquisitions.

Report No. 7/2024 analyses the survey's findings and places them in context with the results from the survey conducted in 2020 and similar surveys carried out abroad. The full report can be read. here .In an appendix to the report is a summary report from the Social Science Institute, which contains detailed results for all questions and an analysis by background variables. The appendix can be accessed here.