Round and round

In the years before the crash, the view was very popular, particularly in the media, that the government's regulatory bodies had grown out of control. Their actions were largely detrimental to Icelandic business. They were far too heavy-handed. Those who put forward this view made use of terms such as „regulatory burden“, “the regulatory industry“ and „regulatory creep“. They asked whether Icelandic society could afford such supervisory and law enforcement bodies.

At the time of the banking collapse, these same parties, who could be called lobbyists, were dismayed that the regulatory authorities had not been on the ball.

Now that some time has passed since the crash, the lobbyists are back on their feet. They have dusted off their terminology. They are seized by a nasty suspicion that ulterior motives lie behind the decisions of regulatory and law enforcement agencies. The authors of anonymous columns are emphatic on the same point. They ask whether Icelandic society can afford such oversight and, where appropriate, a prosecuting authority.

The Competition Authority has recently been the subject of considerable criticism of this kind. For example, coverage of a decision taken by the authority recently, following an investigation into collusion between Byko and Húsasmiðjan. The Competition Authority published a detailed decision on its website, in which the evidence is assessed and the parties' arguments are addressed. The homepage also features a dedicated information page, which is intended, among other things, to guide customers of the companies concerned, and not least those who might find themselves in a similar position.

Those who wish to form their own view on the decision and the perspectives of its critics are advised to take the time to visit the website and familiarise themselves with the matter. The Competition Authority will then take a position on the views of the parties to the case and respond to their criticisms before the Competition Appeal Tribunal and, where appropriate, the courts. This is the legal procedure for such matters.

The work of the Competition Authority is not infallible, any more than other human endeavours. It is therefore important that its decisions can be challenged. The Authority does not shy away from substantive criticism, as it is often useful. However, the Competition Authority rejects criticism that implies ulterior motives, as has been suggested in media coverage.

In all its decisions, the Competition Authority is mindful of the legislature's directives and of applying comparable competition rules in a manner comparable to that of our trading partners. It should be borne in mind in this regard that in most infringement cases, the Competition Authority applies the provisions of the EEA Agreement on the prohibition of illegal collusion and abuse of a dominant position, alongside the Icelandic provisions.

The regulator's actions focus on using competition law to speed up the recovery of the business sector and promote increased productivity. This also leads to lower prices and better service. Following the collapse, the work of the regulator has aimed, among other things, to make it difficult for companies to pass the costs of the collapse on to consumers, as breaches of competition law can otherwise be a tool for doing so.

It is internationally recognised that the public benefit of strong competition oversight is enormous, not least in a small community like ours, where oligopoly is prevalent.

It may be that the rhetoric of the lobbyists will gradually succeed in weakening the safeguards that society has built to protect itself. Perhaps that is how the game is played. But when the next economic shocks strike, these same self-interested advocates will be the first to step forward and point the finger at the regulatory bodies. Once again, they will have failed. The reasons will almost certainly not be sought elsewhere.

Round and round, after round.

[This post was published as an article in Kjarninn on 4 June 2015.]