The Competition Authority has been considering whether there are grounds to launch an investigation into whether the Kringlan Shopping Centre Management (hereinafter 'Kringlan') and/or retail businesses in Kringlan have breached competition law. The background to the Competition Authority's review is, in particular, that in December 2012, media reports appeared stating that the owner of the shop Maníu, had been informed by representatives of Kringlan that she would have to close her Christmas market, which she had set up in Kringlan that same month. This media coverage led the Competition Authority to decide, on its own initiative, to gather information.
An investigation by the Competition Authority revealed, among other things, indications that provisions in the articles of association and rules of Kringlan could constitute a breach of competition law.
In light of this investigation by the Competition Authority, Kringlan has announced changes and a review of the association's regulations. The changes concern, among other things, the composition and role of Kringlan's board of directors. Consequently, individuals with significant competing interests in Kringlan can no longer serve on the board; prior to the change, property owners or occupiers within Kringlan were eligible for election. The changes also include, for example, the introduction of a provision in Kringlan's rules of conduct, which states that the rules are not to prevent price competition between Kringlan's operators. Kringlan has stated that these changes do not constitute an admission of any wrongdoing, but are being made to remove any doubt that Kringlan's activities are intended to be in full compliance with competition law requirements.
In light of Kringlan's review and changes to its regulations and operations, the Competition Authority has decided not to take further action on the matter at this stage. However, should the planned and previously described changes to the framework and operations of the operating company not be implemented at the first opportunity and no later than November this year, the Competition Authority may take the matter up for a formal investigation.
The Competition Authority states that it considers competition in the shopping centre sector to be significant. It is important that all parties involved are aware that cooperation in the Kringlan area, for example, must not unduly hinder new competitors' access to the market or reduce competition. It is therefore important that other shopping centres and hubs, as well as other retail associations, review their framework and practices in light of the above. Otherwise, the Competition Authority may become involved in the future.
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