On the bill to amend the Competition Act

The Ministry of Industry and Innovation yesterday presented a draft bill to amend the Competition Act.

In response to enquiries regarding its position on the bill, the Competition Authority wishes to make the following statement:

The draft bill presented yesterday is a great disappointment, as it proposes a significant weakening of competition law which will worsen the public's terms.

It is serious that the Bill proposes to abolish the Competition Authority's power of appeal to the courts to protect the interests of the public and businesses that may have suffered from harmful barriers to competition. This would make it impossible for the Competition Authority to ensure that the interests of these parties receive a final resolution in the courts. Large companies dissatisfied with the decisions of the Competition Appeals Board can appeal them to the District Court, the Court of Appeal, and, where applicable, the Supreme Court. However, if the bill becomes law, no guardian of the public interest will be able to take the board's rulings to the courts. This will create a system where the advocacy of powerful companies is, in this respect, prioritised and given precedence over the interests of consumers and smaller businesses.

It is also a matter of great concern that it is proposed to abolish the Competition Authority's power to intervene in certain harmful competitive situations, but this power allows the authority to t.d. enables the Competition Authority to prevent companies from sitting unchallenged on monopoly profits to the detriment of the public.

It is also clear that the bill is in direct conflict with actions at the departmental level, in cooperation with the OECD, which aim to reduce barriers to competition, including regulatory burden, arising from laws and regulations. That work aims to strengthen competition for the benefit of the public, whereas the proposals in the Bill have, in significant respects, the opposite effect, i.e. they weaken the competition law and reduce the Competition Authority's ability to promote increased competition.

In its report to the minister, the Competition Authority will strongly warn against the bill being enacted in its current form.

Background information:

The public has a great interest in ensuring that active competition exists in as many markets as possible. Likewise, it is clear that serious breaches of competition law by companies, such as price-fixing, can cause significant harm to the public. Although the public interest in active competition is great, it is, by its very nature, highly dispersed. Furthermore, the position of the public is, of course, entirely different from that of powerful companies when it comes to protecting their interests in the courts. Victims of competition law infringements can also be small businesses, such as start-ups or family businesses. It can also be difficult for such victims to pursue legal action against powerful competitors. For this reason, it is extremely important that a government body such as the Competition Authority can bring legal action and thus defend the interests of society in maintaining effective competition in the courts. Otherwise, it may be impossible for significant issues relating to the interpretation of competition law to be considered by the courts. It cannot be sensible or fair that in competition matters, only companies can bring legal action to protect their private interests.

In certain cases, restraints of competition can have their roots in factors other than mergers or breaches of competition law prohibitions. Such distortion can be just as serious for consumers as the restrictions resulting, for example, from breaches of competition law prohibitions. In response, it is common for competition authorities to be granted the power to take action to remedy such restrictions and to promote the long-term improvement of consumer welfare. Such a power is, for example, found in the UK and was enacted in this country in 2011. In Iceland, markets are often very concentrated and duopolies are common. It is essential that the necessary tools are in place in this country to improve the functioning of key markets for the benefit of the public and the business community. The proposal in the Bill to abolish this remedy would represent a significant step backwards and is contrary to the interests of consumers and the vast majority of businesses.