The Competition Appeals Board confirms that the merger between Valitor hf. and Euro Refund Group North á Íslandi ehf. was rightly rejected.

By decision No. 3/2009, On 30 January, the Competition Authority annulled Valitor hf.'s acquisition of all shares in Euro Refund Group North á Íslandi ehf. (Tax Free).  Valitor is primarily engaged in the issuance of payment cards and acquiring, while Tax Free's main business is the refund of value added tax to foreign tourists.

The Competition Authority concluded that the markets on which the companies operate were closely related.  This was a merger of companies that could create a significant opportunity, ability and incentive to exclude competitors from the markets for payment card services, POS rental, VAT refund services for foreign tourists and so-called foreign exchange conversion. The latter involves a service for foreign tourists, settling transactions made with credit cards in a foreign currency.  It was demonstrated that the position of other operators in the relevant markets could be weakened and that the merger could lead to competitors being forced out of the market and the entry of new operators being made more difficult. This would reduce the choice for merchants in the defined markets, to the detriment of consumers. It was also demonstrated that the remedies the merging parties were prepared to accept would not be sufficient to prevent the harmful effects. The merger was therefore considered to involve serious competition concerns.

Euro Refund Group North á Íslandi ehf. appealed the decision of the Competition Authority to the Competition Appeals Board, demanding that the authority's decision be overturned as it had not been proven that the merger would have an adverse effect on competition. Alternatively, the company requested that the appeal board authorise the merger subject to the aforementioned conditions.

The Competition Appeal Tribunal has now upheld the decision of the regulator. In its ruling, the panel agrees with the Competition Authority's definitions of the markets under consideration in this case, and that the Authority has sufficiently presented arguments that the merger is fundamentally contrary to competition law. The Board also finds that the appellant has not demonstrated that conditions could be imposed on the merger to prevent the harmful effects it would entail. The appeal board's decision can be found on the Competition Authority's website.

See the decision of the Appeal Board for further details. No. 6/2009.