In its coverage yesterday, Morgunblaðið suggested that pension funds suffered a six billion króna loss due to significant delays in the sale of Míla, which could be attributed to the Competition Authority's merger investigation. Unnamed representatives of pension funds are quoted as criticising the handling and working practices of the Competition Authority.
In the interest of an informed discussion, it is necessary to correct the above. The Competition Authority's investigation was conducted entirely within the deadlines set by law for merger investigations, and there were no delays in the Authority's handling of the case. However, it should be noted that the definitive merger notification was not received from the merging parties until 8 February, or more than three months after the acquisition was announced. A formal investigation of a merger case cannot be initiated until a complete merger notification has been received.
The investigation highlighted significant barriers to competition that would result from the transaction and its basis as they were presented to the Competition Authority. The transaction was thus based on a long-term wholesale agreement between Síminn and Míla which created barriers to competition, for which there was no precedent. Furthermore, telecommunications systems and wholesale operations were transferred from Síminn to Míla in the run-up to the sale, which strengthened Míla's position and, if left unchanged, was likely to harm competition. These barriers to competition were likely to harm the public interest and the business sector, and called for action by the Competition Authority.
The investigation concluded with a settlement with the merger parties, which involved significant changes to the aforementioned wholesale agreement and commitments to further actions by the merger parties. The parties have publicly stated that these measures necessitated a revision of the purchase price.
The outcome of the case is described in detail on the Competition Authority's website., see here. A detailed description of the investigation and proceedings of the Competition Authority is also available (see below in the path).
Given the importance of the matter, the regulator endeavoured to ensure transparency in the investigation by repeatedly publishing notices on its website regarding the status of the investigation and giving interested parties the opportunity to submit their views. Market participants raised detailed views and concerns regarding the impact of the transaction on competition. The same was done by the Communications Authority, which, together with the Competition Authority, has the statutory duty to protect competition in the telecommunications market.
The Competition Authority has not received any comments from pension funds regarding the investigation, either during its course or afterwards.
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