The Morgunblaðið's inquiry in connection with an investigation into management and ownership ties in the fishing industry

The Competition Authority received an enquiry from
to the newspaper Morgunblaðið, requesting specifically detailed information about the investigation
the authority's supervision of management and ownership structures in fisheries and a contract with
to the Ministry of Food regarding its report on the matter. In the interest of an informed discussion, the response is
Published by the Competition Authority on its website.

Specifically, Morgunblaðið seeks answers to
the following questions:

1. When and how did this collaboration come about, where
   What was the occasion, who took the initiative and in what way, and what is its framework?
2. Has the Competition Authority fulfilled its duties?
   In accordance with Article 4 of the agreement on the inspection, and informed the Ministry of Food of the situation.
   on a regular basis, and how often then?

Then wishes
The Morning newspaper, according to the documents concerning the agreement and its lead-up.

It is worth remembering that last April, opened
The Competition Authority has an information page on its website where a detailed account is given
for the review and its progress. A project plan is published there, among other things.
where the decision of the Competition Authority to proceed is set out
the review, legal basis, subject matter, stage, framework and status
of the investigation.

1. When
This collaboration came about, what was the reason, who took the initiative and with what
What was its purpose and what was its framework?

The first case concerns management and ownership ties in
fisheries

The Competition Authority has for a long time
raised the issue of management and ownership links in fisheries in connection with
merger cases on the market. Three decisions of the regulator in this regard can be mentioned.
relationship.

• In decision no. 10/2013, Purchase
  Síldarvinnslan hf. owns Bergi-Hugin ehf.., were ownership and management ties
  The sale of Samherji hf. and Gjögur hf. to Síldarvinnslan is under review. It says so.
  in the decision: „The largest owners of Síldarvinnslan are companies that
  also engaged in fishing and fish processing. On the one hand, Samherji hf., which owns about 45%
  share and Gjögur hf., which owns approximately 34.1% of Síldarvinnslan. In light of this
  Regarding the ownership, the Competition Authority decided to expand the investigation and assess
  whether Samherji (or, as the case may be, Samherji and Gjögur jointly) had control over
  The herring processing plant. If that were the case, the announced merger would in fact have involved
  sees the merger of Bergs-Huginn with Síldarvinnslan, Samherji and Gjögur. Together have
  These companies have a larger share of the quota than the Fisheries Management Act allows.“

The conclusion was that
there would be no grounds to conclude that Síldarvinnslan was under the control of
Samherja and Gjögurs. However, it was decided to launch an investigation into whether
The companies would have breached the competition law ban on anti-competitive collusion.
That investigation was dropped, as the Competition Authority had not
the financial means to see it through to the end, not least due to the pressure of
Investigations into merger cases.

• In decision no. 19/2020, The merger of Brim Ltd.,
  Kambs hf., Grábrókar ehf. and alleged control over Brimi hf.,
  It was argued that the Reykjavík Fishing Company and associated parties would take over
  dominance in Brimi. Thus, the Competition Authority investigated whether there was
  that the basic merger would involve wider control than had been announced.
  The merger parties objected to the regulator's preliminary assessment. During the investigation,
  The Competition Authority is examining whether Brim's purchase of Kambi and Grábrók had
  adverse effects on competition if the wider control over Brimi were proposed
  fundamental. The conclusion was that this was not the case and the merger was approved without
  comments. However, it was announced that further consideration would be taken, in another
  matter, in light of changed circumstances and new information whether there had arisen
  control of Brimi, which should have been notified in accordance with the law.
• In decision no. 2/2021, The merger of Bergs-Hugins
  ehf. (Síldarvinnslan hf.) and Bergs ehf., were taken into consideration
  The management and ownership links of the Síldarvinnslan group with Samherji and Gögur
  Ltd. The decision states that Samherji and related parties own just over 48% in
  To Síldarvinnslan and the owners of Gjögur, just over 341 TP3T. Then it says: „To
  In addition to the above, there are indications of close management and ownership links.
  between Samherji, Gjögur and Síldarvinnslan, which is manifested, among other things, in the fact that one of
  One of Gjögur's largest owners has, until recently, served as the CEO of Samherji.,
  in parallel with owning an equity stake in Síldarvinnslan through a holding company
  which is also owned by Samherji. This, among other things, indicates significant
  Connections between major shareholders in Síldarvinnslan.“

The matter was not taken up.
a definitive position on sovereignty, as a resolution on the matter did not prove to be a prerequisite
the handling of the matter. However, it was announced that the supervisory authority would request further information.
information and viewpoints from the parties concerned and the governments and take into account
to subsequently determine whether, and if so in what manner, a further investigation should be carried out
possible control and, where appropriate, cooperation between the companies concerned. This
The investigation has not been concluded due to the aforementioned busy schedule in other matters.
the supervisory functions.

• By decision no. 28/2022, The merger of Síldarvinnslan
  Ltd. and Vísir Ltd., there were ownership ties within the Samherji group, Síldarvinnslan
  and Gjögurs/Kjálkanes are considered from two perspectives, i.e. on the one hand, based on
  the merger as it was notified to the authority and, on the other hand, taking into account
  Possible joint control by Samherji and related companies over Síldarvinnslan.
  Before the investigation into
  However, once the merger had commenced, the Competition Authority had announced a decision to
  to commence the review of the management and ownership relationships of fisheries companies which
  is under discussion.

In parallel with the above discussion on management-
and regarding ownership ties in the fishing industry, the Competition Authority has pointed out to the government that
there would be some difference in the substance and implementation of competition law on the one hand and
of fisheries management legislation, however, with regard to jurisdiction and the relationship between
of fishing companies. It should be mentioned that in Review
The Competition Authority, 8 March 2021, on the draft bill on amendments
in various laws in the field of fisheries management, the concept of sovereignty is encouraged.
The fisheries management legislation will be brought more closely into line with the provisions of competition law.
The review states, among other things, the following:

„The current fisheries management law and
their implementation may lead to fisheries companies being considered
under the control of a specific or specific persons under competition law but not
in accordance with the aforementioned legislation. This situation where the same is being interpreted
Presenting matters in different ways under different laws can lead to misleading messages.
of the authorities to businesses in this field. Likewise, such different interpretation can
leading to the public interest being harmed.“

The same views were reiterated in comments to
of the Industry Committee 22 March
2021, 3rd May
2021 and 14.
January 2022.

Published priorities of the Competition Authority

From the above, it is clear that the Competition Authority
has had cause to and has emphasised exploring in more detail administrative and
ownership interests in fisheries, but did not have the financial means to do so. Then
the supervisory authority has for some time urged the government to strengthen the legal framework on
arena of fisheries management, in a competitive regard. In emphasis
Chairperson of the Competition Authority for the years 2022-2024, which were confirmed in
November 2021, the following is stated:

„Thirdly, it is established that
Conditions in the fishing industry have created the foundations for strong companies that often
deliver a good return which can become a foundation for them and their owners to
invest in companies related to fisheries and in other areas of business.
There is a reason to monitor this development and its effects on
competition.“

Foundation laid for strengthening oversight and cooperation
regulatory bodies

In the aforementioned priorities of the Competition Authority
for the years 2022-2024 (from November 2021) further states:

„Then the supervisory authority works to ensure that
strengthen systematic oversight of ownership and governance relationships. This year has
Cooperation on these matters has been sought with the Central Bank of Iceland and the Icelandic Fisheries Administration.
The aim is to complete the project's needs analysis in 2022. In parallel
The supervision will partly analyse management and ownership links in specific areas.
as a pilot project in the development of a systematic overview.“

In May 2021, the Competition Authority published a report number.
2/2021, Inter-company management and ownership relationships – project
Competition Authority 2008-2021, but there is an overview of the coverage there.
of the supervisory authority on these matters, in decisions, opinions, reports, etc. There is also
to discuss in particular the proposed strengthening of supervision in this area. On this
says, among other things:

„It is important that
The Competition Authority has ongoing oversight of management and ownership relationships and
to be able to disseminate information and increase transparency in this area. With that in
The Competition Authority is working to strengthen the regular oversight of
these matters. Does the supervisory authority intend to establish procedures, databases and better
software that enables it to have more regular and continuous oversight and
publish special reports on that basis. Has the supervisory authority sought information
and cooperation between many parties regarding this. It is very important that
The Competition Authority has the financial scope to strengthen the sustainable
its supervision of management and ownership relationships in this respect.“

Furthermore, the report states that in the year 2020
work has commenced on the needs analysis and the formulation of an improved supervisory framework
in this respect. If the supervision has called for advice on this, in addition to
that the supervisory authority and other institutions in this field are exploring further cooperation
between them. The progress of the project will be determined, among other things, by financial
room to manoeuvre.

The institutions referred to here are the Central Bank
Iceland, the Fisheries Administration and the Tax Authority. The conversation between these institutions has centred on
identify common ground, spot ways to ensure smooth progress
information exchange between institutions, where appropriate through legislative changes, and build
of experience and knowledge in this field.

The Competition Authority's review of management and
Ownership structures in fisheries are intended to be used to build up
Information technology action for ongoing monitoring and to identify opportunities for
Further cooperation between institutions.

The Competition Authority's involvement in the Ministry of Food's strategic work

In the first half of 2022, the Ministry of Food
turns to the Competition Authority to obtain information and viewpoints which
could be new in the preparation of strategic work in fisheries affairs, which later
began under the title „Our Resource“. In that dialogue, the ministry sought in particular
information on the Competition Authority's overview of management and ownership links in
in fisheries, but it was noted that an overview of this would be of great importance for policymaking
Policy and legislation in fisheries.

On this occasion, the Competition Authority reported
from the foregoing background, i.e. that management and ownership ties in fisheries
had been considered and that the supervision considered it necessary (cf. the emphasis
to strengthen its oversight of management and ownership relationships in this area.
Furthermore, a dialogue would be initiated between the supervisory authorities, on an initiative
of the Competition Authority, which aimed to strengthen this oversight and increase
efficiency in supervision. The Fisheries Administration, which is part of the Ministry of Food, would be
a party to that conversation.

In accordance with its responsibility for this area of policy,
as well as for the preparation of the aforementioned policy, the Ministry of Food took these
a matter for closer examination. To facilitate this discussion, took
The Competition Authority is drafting a memorandum on an analysis of management and
Ownership links of fisheries companies, Draft of that memorandum was sent
the Director of the Ministry of Food on 2 May 2022. The ministry completed
then the memorandum and used it in a discussion on their platform.

The above discussion led to the following:
The ministry considered it desirable to enable the Competition Authority to undertake
An investigation into management and ownership structures in the fisheries sector and to facilitate
closer cooperation between the institutions that collect information and monitor
management and ownership relationships. In preparation for this, the ministry drew up draft
a declaration of intent by the parties involved and an agreement with the Competition Authority,
which was later confirmed.

On the part of the Competition Authority, the premise was
in view of the above, that the Competition Authority itself would decide on an investigation into
management and ownership relationships on its own terms and in accordance with priorities that
had previously been decided by the supervisory authority. In the drafting of a contract
The supervisory authority placed special emphasis on the fact that the agreement would not undermine
independence of the oversight. The publication of the draft agreement now issued bears this
with them.

The Competition Authority also considered it unnecessary to
to make a separate declaration of intent alongside the agreement. In discussions between institutions, where
Amongst other things, in connection with the promotion of the agreement, there was a consensus on strengthening
their collaboration would be a separate project, but that the investigation into management and
Ownership ties in fisheries would be used to build up
information technology environment and instead focus on institutional cooperation. By doing so
gained experience that could be useful in their future collaboration.

More on the legal basis

According to paragraph d of the first paragraph of Article 8 of the Competition Act,
the role of the Competition Authority „to explore administrative and ownership links
between companies: shall this be done, inter alia, for the purpose of assessing whether in Icelandic
that the business community exhibits signs of circularity, undesirable connections or
anti-competitive consolidation that can limit competition.“ According to the same article
The institution shall publish reports on its observations. Article 19 of the Competition Act.
also grant the supervisory authority a clear mandate to obtain information and data for
such an investigation.

There is no doubt about the rights and duties.
the authority to undertake an investigation of this kind.

In its dealings with the Ministry of Food, the Competition Authority had
also bearing in mind his role as the advocate for competition on the field
of the authorities. Thus, the Competition Authority is required, pursuant to c-item of the first paragraph of Article 8.
competition law, „to ensure that the actions of public authorities do not limit
competition and point out ways to the government to make competition more effective and
facilitate new entrants“ access to the market“. Will the authorities sort this out?
projects, among other things, carried out by assisting the government with
preparation of legislation and regulations and policy-making in their field.

It is obvious that policymaking in the field, there on
with regard to management and ownership ties, can have a significant impact on
competitive conditions in fisheries and other industries. Therefore
Substantive and consistent with the role of the Competition Authority to seek ways to
so that its observations on governance and ownership relationships can be used in government policymaking.
The contract should be respected in that light.

Other aspects of the framework of the review

As previously noted, more detailed information can be obtained.
information on the framework of the review, including the project plan, on
information page on the regulator's website.

2. Has
The Competition Authority fulfilled its duties pursuant to Article 4 of the agreement regarding the investigation and
Report to the Ministry of Food on the status of the project regularly, and how often?

In accordance with Article 4 of the agreement, the Competition Authority distinguishes
to keep the Ministry of Food regularly informed of the project's progress during the term of the contract
stands. In accordance with this, the following have been granted to the ministry
Information:

On 7 March 2023, the CEO
The Competition Authority's call with the Director General, in which it was reported that
the recruitment of a staff member to the project, the planned appointment of an advisory group, connection
regarding databases and the planned publication of the project plan.

On 31 March 2023, the CEO sent
Draft memorandum on the situation for the information of the Ministry of Competition and Consumer Affairs
of the review and the project plan. This Memorandum
is available on information page
the Competition Authority and sent a request for information to
fisheries companies.

On 4 April 2023, the CEO
A meeting of the Competition Authority with the Minister of Food, where a report was given.
the aforementioned memorandum.

By email on 17 April 2023, the Director General was informed
The Ministry of Food sent a link to notification
Competition Authority where the information page about the study is presented. With
The announcement gave everyone the opportunity to submit suggestions in
on the occasion of the inspection.

By telephone on 19 July 2023, informed
Director-General of the Competition Authority to the Director of the Ministry of Food, regarding
publication Announcements
on the authority's website/information page regarding the status of the investigation.

The information that the Minister for Food has received
The observations are the same as those published on the website/information page.
of the Competition Authority. It should also be noted that the ministry has not
to submit comments in relation to the information that has been provided to it
granted.

The Competition Authority will continue to make
the ministry is informed of the progress of the investigation, in parallel with
The information page about it will be updated. It should be noted in this regard that
The ministry has neither requested nor will it be granted access to that information.
which the Competition Authority obtains in the investigation, other than insofar as will be provided
to appear in a report on the investigation.

3.
Access
to data

The Morgunblaðið has requested a copy „of all
correspondence, emails, minutes of meetings and the relevant cooperation agreement in
the background to the agreement and until it was presented“. Upon closer inspection
The subsequent investigation revealed that the request for information was based on Chapter II.
Act No. 140/2012 on freedom of information. Furthermore, Brim hf. has requested the same information,
i.e. „all relevant data relating to the contract and the communications of the parties'
of the authorities on that occasion“. Brim's request for information also relies on Chapter II
Freedom of Information Act.

In accordance with the above information requests
The following information concerning the communications between the Competition Authority and senior management is now published.
of the Ministry of Food, concerning the preparation of the agreement and until it was presented
on the website of the Ministry and the Competition Authority on 5 October 2022.

In specific cases, have been deleted from
disclose to the other party information concerning the private affairs of individual employees,
cf. Article 9 of the Freedom of Information Act No. 140/2012. Further details are provided here on
after.

1. Email, dated 10 March 2022, from
   Director-General of the Ministry of Food to the Director and Chief Economist
   of the Competition Authority. Attached was a memorandum on policymaking on
   the food sector, where, among other things, competition issues were discussed. A request for a meeting and
   referred to a conversation with the Director General of the Competition Authority. That conversation was
   informal but provided for in paragraph 13 above.
2. Email, dated 10 March 2022, from
   from the Director-General of the Competition Authority to the Director of the Ministry of Food, there
   in response to a previous letter from the ministry. Please note that the text has
   deleted concerning the private affairs of an inspectorate employee.
3. Email, dated 14 March 2023, between
   of the ministry and the oversight which aimed to establish a dialogue.
4. Email, dated 31 March 2022, from
   Director-General of the Ministry of Food to the Director and Chief Economist
   The Competition Authority. It states that the matter was reviewed internally.
   of the ministry and that the minister is determined to tighten oversight in this area. Requested
   was after a meeting about this. The answer to that request was delayed until 6 April, but on that
   On the 1st and 12th of April, there were communications regarding a possible meeting time. Subsequently, an informal
   Meeting held on Teams on 12 April. Please note that the text has been
   redacted concerning private matters. Also an email, dated 2 May 2022, from
   from the Director-General of the Competition Authority to the Director of the Ministry of Food, there
   which are sent draft memoranda that the Competition Authority had undertaken
   to be negotiated after the meeting on 12 April. The memorandum therefore contains a summary
   of the discussion that took place at the meeting. The memorandum was, among other things, compiled for
   preparatory discussion within the Cabinet Office and as a basis for possible
   agreement. At the meeting, the ministry's views were, among other things, expressed with regard to
   mapping of management and ownership relationships in fisheries. Did those viewpoints
   along with the priorities that the Competition Authority had previously set out
   officially, see the discussion in the memorandum above.
5. Email, dated 18 May 2022, from
   Director-General of the Ministry of Food to the Director and Chief Economist of the Competition Authority,
   where it is stated that the minister intends to enter into a contract with
   The Competition Authority which enables it to launch an investigation. Email, dated 19 May 2022, from
   from the Director-General of the Competition Authority to the Director of the Ministry of Food, there
   to which the Director General's email is responded. The email also carries
   that the supervisory authority was in communication with other supervisory authorities, but this is described in more detail
   from the background of the aforementioned communication.
6. Email, dated 20 May 2022, from
   Director-General of the Ministry of Food to the Director and Chief Economist
   The Competition Authority, where a proposal for a meeting time is discussed.
7. Email, dated 25 May 2022 to 28.
   May 2022, between the Director-General of the Ministry of Food and the Director and
   the Competition Authority's chief economist, where the meeting time is discussed.
8. At the end of May, the ministry and
   The Competition Authority again on the matter. Following this, or on 30 May
   In 2022, the Director General of the Competition Authority sent a letter to the Director of the Ministry.
   Ministry of Food email, but in its attachment was a memorandum substantially the same
   and had been sent in a previous post on 2 May, although its title was
   „Memorandum of Understanding“. The document is, after all, intended to be a memorandum.
9. Email, dated 2 June 2022, from
   Director-General of the Ministry of Food to the Director and Chief Economist
   of the Competition Authority. Attached is the memorandum which
   The Competition Authority had drafted and sent it on 2 June, but with additions
   and changes. The email requests a review and reports on the planned
   consultation within the Cabinet Office.
10. Email, dated 22 August 2022, from
    Director-General of the Ministry of Food to the Director and Chief Economist
    of the Competition Authority. Attached to the email were draft terms of reference.
    ministries and regulatory bodies and the agreement of the ministry with
    The Competition Authority. It should be noted that the letter of intent was never signed or
    submitted to all its parties, but the Competition Authority considered it unnecessary, see.
    the discussion above. 
11. Email, dated 8 September 2022, from
    from the Director General of the Competition Authority to the Director of the Ministry of Food. Attached
    The email contains a draft of the aforementioned agreement, where the supervisory authority had made
    Proposed changes (highlighted in the text). As outlined in the email.
    The proposed amendments were aimed, among other things, at safeguarding independence.
    regulatory bodies.
12. Email, dated 12 September 2022,
    from the Director of the Ministry of Food to the Director-General and Chief Economist
    The Competition Authority, to which new draft agreements are sent.
13. Email, dated 14 September 2022,
    from the Director of the Ministry of Food to the Director-General and Chief Economist
    The Competition Authority, to which a new version of the draft agreement is sent
    and mention that they have been approved by the minister.
14. Email, dated 16 September 2022, from
    Director-General of the Competition Authority to the Director of the Ministry of Food.
    Attached to the email are the draft contract, with proposed amendments in
    „track“. The email states that the board has discussed
    The contract and proposed amendments are explained.
15. Email, dated 18 September 2022,
    from the Director of the Ministry of Food to the Director-General and Chief Economist
    the Competition Authority, to which the final draft of the agreement is sent, as well as
    of which the draft press release from the ministry is attached. Earlier this day
    He sent the final draft to by email, which were amended with this post.
16. The contract was then signed on that day.
    19 September 2022. Is it already available on information page of the supervisory authority.
17. Email, dated 25 September 2022,
    from the Director of the Ministry of Food to the Director-General and Chief Economist
    the Competition Bureau, where a change is made to the draft of
    press release.
18. Email, dated 28 September 2022, from
    Director-General of the Competition Authority to the Director of the Ministry of Food.
    The letter was accompanied by a draft of the Competition Authority's press release. A review was underway.
    overseeing the news regarding ensuring correct information about the agreement and the review
    of the Competition Authority. The Competition Authority then sent the ministry updated
    A draft of a news article, twice, after presenting drafts to the Central Bank and the Fisheries Administration.
    to the news and got a reaction. Take care of this. email, dated 4th.
    October 2022 (together with the draft),  email, dated.
    5 October 2022 (together with the draft) and the ministry's reply on the same day in by email.
19. Email, dated 5 October 2022, on
    between the information officer of the Ministry of Food and the Director-General
    The Competition Authority, where a link is sent to, on the one hand, a news article from the Ministry of Food
    and on the other hand, the news from the Competition Authority.