Trade associations may not take part in discussions about prices.

[ See also the article published on Vísir on 25 October 2021. ]

In recent days, the media have reported on the impending
product shortages in various sectors, rising raw material prices, disruptions in supply chains and
other economic consequences of the coronavirus pandemic that may have an impact on
prices and consumer interests in this country.

Representatives of business interest groups have taken part in
to this discussion. That is what the Director General of the Federation of Icelandic Industries had to say.
He/She/It reads in the media that it was „very likely that [product]the shortage
in the short term will cause price increases in at least some product categories.“

The executive director of the Association of Trade and Services has also
expressed concern that „there will continue to be pressure on prices due to
imported inflation […]“ in an article in the Viðskiptablaðið under the headline „Further increases expected“ along with declaring in the Business Moggan that „obvious“is that „the increases caused by these significant rises in raw materials, […] have not yet fully emerged [on Iceland]“.
The chairman of the Icelandic Farmers' Association was quoted as saying that price increases for manufactured fertiliser
will ultimately lead to an increase in the price of the product and cited production as an example
on vegetables and dairy products.

On this occasion, the Competition Authority would like to state
The following:

• Provisions of competition law apply to interest groups
  deficiencies in their lobbying, and business organisations must therefore be extremely careful.
  cautious when it comes to discussion and education that can affect market behaviour
  of members. All participation in discussion about prices and pricing is particularly
  unacceptable and should not take place in the sphere of interest groups.

• It is particularly important to be mindful of this when in
  Monopolistic markets are involved and economic difficulties are looming.

• In a competitive market, a rise in the input price does not
  to automatically lead to an increase in the price to consumers. Competition law provides for
  for each and every company
  take their own measures and make independent decisions to respond
  such challenges on their own operational grounds and without any consultation with
  competitors or incentives from interest groups.

• Under
  In circumstances such as these, when difficulties arise, effective competition sets
  pressure on company managers to create conditions for increased efficiency.

• Consumers expect companies to decide for themselves how they behave
  their market position and how they price their products. It is also important when
  circumstances in which consumers provide strong oversight of companies.

In light of this, urges
Competition law for representatives of all types of interest groups in
the business community not taking part in coverage related to pricing or
other market behaviour of companies.

The supervisory authority also reminds them of their duties
company executives to make independent decisions in their operations without regard
for discussion at the level of interest groups.

The supervisory authority also directs consumers to
be on guard against future price increases. Suggestions can be directed
regarding price increases to the Consumer Association, the ASÍ price monitoring authority or
Consumer Authority. The Competition Authority then takes up tips about possible breaches of
competition law.

Background information

Competition in business is necessary for
Icelandic business life where it increases the public's welfare and contributes to
Economic efficiency in business. Effective competition creates jobs and promotes
increased productivity, innovation and economic growth. Thus, measures that
Strengthening competition will further contribute to a faster economic recovery.

The Competition Authority has in several instances had to have
interference with business associations due to actions that contravened competition law.
In 2008, the Competition Authority imposed fines on The Industry Association
and the Confederation of Trade and Services due to actions that contributed to price-fixing on
foodstuffs and in the year 2009 fines were imposed on Association of Icelanders
merchant and The Icelandic Farmers' Association,
among other things, due to the discussion about the need for an increase in the price of food. The Competition Authority will continue to take firm action.
on offences of this kind.

Recently, the Competition Authority requested information from
Association of financial institutions on the occasion of the association's report on pricing
of member companies in the insurance market but in the director's article
The organisation's report, published in the media, addressed, among other things, the impact.
wage development, compensation amounts and other factors on contributions. Has
The Competition Authority is now considering whether there is a reason to launch a further investigation.
because of this, but the competition authorities have had to have before
concerning the public representation of the insurance companies' interest group
Insurance company pricing.