On 11 October 2005, the Competition Authority reached the conclusion in a decision No. 8/2005 that the health authorities had distorted competition by refusing to negotiate a contribution towards the cost of psychological therapy for insured patients with clinical psychologists. The Competition Authority's decision considered that clinical psychologists and psychiatrists were competitors regarding the non-pharmacological treatment of mental health problems. It was considered to be anti-competitive that psychiatrists, but not psychologists, had been contracted, and the Minister for Health and Insurance was instructed to enter into contracts with independently practising clinical psychologists. This decision was appealed to the Competition Appeals Tribunal, which was divided on the matter, see ruling No. 19/2005. Its majority held that the Minister of Health's refusal was supported by the Health Services Act, which takes precedence over competition law. For this reason, the appeals board annulled the Competition Authority's decision. Its minority, however, wished to uphold the authority's decision.
The Icelandic Psychological Association appealed the appeal board's ruling to the courts and demanded that it be annulled. With in its judgment today The Reykjavík District Court upheld the association's claim. The court did not agree with the appeal board's conclusion that the Act on Health Services prevents the Competition Authority from taking the measures against health authorities that were set out in its said decision.
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