The Competition Authority has today authorised, by decision No. 4/2012 Limited cooperation with financial institutions aimed at accelerating the processing of debt matters concerning index-linked loans, following the judgment of the Supreme Court of Iceland on 15 February.
The decision takes into account the importance of expediting the restructuring of debts of individuals and companies. The authorisation is subject to detailed conditions concerning the form and framework of the cooperation and the conduct of the banks in relation to the processing of the aforementioned loans.
Emphasis is placed on consumers enjoying a fair share of the benefits of the collaboration. This is sought to be ensured through conditions stipulating the participation of a debtors' representative in the consultation, and also making it possible for representatives of the Consumer Authority and the consumer ombudsman to take part. A further condition is also set that the collaboration does not prevent individual lenders from offering their customers better terms, and partners are also prohibited from claiming legal costs in court proceedings brought as a result of the collaboration.
Furthermore, it is a condition that the financial institutions suspend enforcement actions regarding claims that are clearly subject to the Supreme Court's judgment, for the duration of the collaboration. The collaboration is otherwise limited to financial institutions that have provided loans which may fall under the aforementioned Supreme Court judgment, and each of these institutions must appoint a permanent representative to handle the collaboration on its behalf. Furthermore, the collaboration shall be documented, and records of meetings and decisions shall be kept. This is intended to prevent the collaboration from leading to broader consultation.
Article 10 of the Competition Act prohibits anti-competitive collusion. Under Article 12 of the same Act, it is unlawful for associations of undertakings to decide on restrictions of competition or to encourage barriers which are prohibited under the Act. Under section 15 of the Competition Act, the Competition Authority may grant an exemption from the aforementioned provisions, provided that certain specified conditions are met. The justification for such an exemption is that the cooperation better promotes the interests which the competition law is intended to protect than a ban on co-operation would.
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