This news was
Updated on 11 January 2024, see below.
In recent semesters, the Competition Authority has independently analysed the calculated benefits of its interventions, whereas the National Audit Office has, among other things, emphasised that such an assessment should be carried out. The Competition Authority has published Report no. 4/2023, Calculated benefit due to intervention by the Competition Authority, 2013-2022, Report no. 4/2023 Estimated benefits from the Competition Authority's interventions, 2013-2022, thwhere the full results of the analysis are published for the first time. It is planned that the Competition Authority will publish an annual report from now on, presenting the calculated benefits, and this is the first of these reports.
This analysis is based on OECD criteria., A guide to help competition authorities assess the expected impact of their activities . The criteria are based on the work of the OECD, academics, competition authorities in various OECD member countries, and previous research on the economic effects of competition enforcement. It also builds on the methodology used by the Competition Directorate of the European Commission in a comparable analysis, which in turn is fundamentally based on OECD guidelines.
Estimated benefit (benefit to business customers, i.e. final consumers and other businesses) from the Competition Authority's intervention in collusion, The estimated benefit (to business customers, i.e. final consumers and other businesses) from the Competition Authority's interventions in cases of collusion, abuse of a dominant position and restrictive mergers over the ten-year period 2013-2022 amounted to 0.31-0.52% of GDP over the same period, or equivalent to 18-30 times the Authority's funding for the period.
The estimated benefit was on average 10.0-16.9 million tonnes of CO2 per year during the period 2013-2022, of which 4.4-7.0 million euros was due to intervention in cartel infringements, 1.8-3.6 million euros due to intervention in abuse of a dominant position, and 3.8-6.3 million euros due to the annulment or conditional approval of restrictive mergers. Amounts are in 2022 prices.
The above findings correspond to an annual calculated benefit of approximately 30-50 thousand krónur per person, based on population and gross domestic product for the year 2022. If the benefits targeted in the financial plan are divided equally among all citizens, it can be assumed that each person's share could amount to 50,000 krónur per year.
The calculated benefit is estimated from the Authority's interventions in cases of collusion, abuse of a dominant position, and restrictive mergers. It should be borne in mind that the Authority's remit is much broader. For example, the Competition Authority shall ensure that the actions of public authorities do not restrict competition, draw the attention of ministers to provisions of law that conflict with the objectives of competition law and otherwise advise the government on ways to make competition more effective and to facilitate the entry of new competitors into the market. The Competition Authority also has the power to intervene to remedy or counteract impediments to competition that do not stem from breaches of competition law by companies, but rather from market failures which prevent the public and the business sector from enjoying the benefits of effective competition.on the relevant market. This is a legal provision that permits market investigations and measures where the focus is not on eradicating past infringements, but on promoting better market functioning in the future. Finally, it should be noted that the supervisory authority has a general advocacy role and participates in international cooperation which promotes consistency in the application of competition rules, thereby supporting competitiveness. The impact of the above-mentioned tasks is not included in the analysis. It should be added that the aforementioned OECD criteria are not intended to assess the deterrent effect of competition law or the enforcement of competition authorities.
The Competition Authority published in April last year. Discussion paper no. 1/2023 , Estimated benefit of Competition Authority intervention, draft methodology, where the methodology of the analysis was described and feedback on it was requested. The supervisory authority has since processed that feedback. Furthermore, an independent expert, Dr Jón Þór Sturluson, Dean of the Faculty of Business at the University of Reykjavík, has reviewed the methodology, assumptions and calculations, in accordance with the recommendations of the National Audit Office.
Í Financial plan 2024-2028 The objective is set out that the estimated annual benefit from the Competition Authority's decisions should average 0.51% of gross domestic product over the past 10 years. This objective has remained unchanged since 2018.
Í An administrative audit by the National Audit Office The Competition Authority's work programme, published in August 2022, emphasised that a regular assessment of the benefits of the Competition Authority's activities will be used to define future priorities, objectives and performance indicators.
The European Commission applies methods based on OECD criteria to assess the benefits of intervention by its Competition Directorate-General. The European Commission assesses that The direct benefit from the competition department's interventions amounted to between 12 and 21 billion euros per year over the 10-year period from 2012 to 2021. , or the equivalent of approximately two to three trillion kroner.
Attachment: Report No. 4/2023 Calculated benefit from the Competition Authority's intervention, 2013-2022.
Updated 11 January 2024:
On Monday, 8 January, the Competition Authority received an enquiry from Morgunblaðið requesting further information on the results of the review by Dr Jón Þór Sturluson of the assessment presented in Report No. 4/2023. In addition, a request was made for previous calculations of the benefits of competition surveillance in Iceland.
The reply to the inquiry, dated 10 January 2024, was accompanied by a memorandum from Dr Jón Þór Sturluson, dated 21 December 2023, in which he sets out his findings. The memorandum is also made available. here.
The response also points out that Dr Gylfi Magnússon, now a professor at the Faculty of Business Administration at the University of Iceland, previously conducted an assessment of the benefits of the Competition Authority's interventions, in 2014 and 2016. This is discussed in more detail in Report no. 4/2023, paragraph 17.
The following is then stated in the answer:
„Due to coverage in
It is only right to note in this morning's Morgunblaðið (10 January 2024) that the assessment
includes the calculated benefits to customers (i.e. consumers and businesses) of
The Competition Authority shall stop illegal collusion and abuse of a dominant market position.
and prevent competition-reducing mergers. In the interest of transparency, the assessment is published on
a certain range, which inevitably reflects uncertainty in the assessment. Furthermore,
it is clearly stated that the assessment does not include the full effects of competition oversight,
which is reflected, inter alia, in the deterrent effect of the interventions or other work
The inspections are not evaluated.
This methodology
is the same as that which has been used when benefits from competition supervision are
evaluated elsewhere in the world. Base the criteria on research
of academics and competition authorities in various OECD member countries. In particular,
with reference to the guidelines issued by the OECD in 2014 ( A guide to help competition authorities assess the expected impact of their activities ).
The Competition Authority's report, for example, states that
the competition commissioner of the European Commission and Dutch, British and
Hungarian competition authorities have prepared and published such analyses in recent years.
The Competition Authority had, among other things, these analyses in mind. In addition, there was
In preparing the assessment, views were sought on the methodology, see news report.
á this path, from 19 April 2023.
Then the results were reviewed, as previously stated. In
In the aforementioned memorandum by Dr Jón Þór Sturluson, it is stated, among other things, that he does
no comments on the assumptions, „but they are based entirely on
a methodology recommended by the OECD and, in some cases, more detailed
the methodology of the European Commission which leads to a more cautious
conclusion.
In this work, consideration was also given to recommendations.
Supreme Audit Institution of administrative review which was published in autumn 2022, but where the National Audit Office emphasised the benefit assessment of
of this type, where the premises would be published and scrutinised.“
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