The Norwegian Competition Authority is reviewing the banking market

The Norwegian Competition Authority has launched a review of competition in the country's banking market, and this is the first step towards a possible market investigation into the banking sector.

Í News from the Norwegian Competition Authority The report states that banking services, particularly the terms of deposits and mortgages, are of great importance to the financial situation of Norwegian households. Greater competition could lead to lower mortgage rates, higher interest rates on deposits and lower service fees. Even a small interest rate difference can make a significant difference to individual households, according to the report, amounting to thousands of Norwegian kroner per year.„It is therefore important that competition between banks is effective and efficient.“

The aim of the review is to analyse and assess the factors in the banking market that may affect competition between banks. To this end, the Norwegian Competition Authority will collect information from banks and other parties with detailed knowledge of the market and its operations. Through this review, the competition authority seeks, among other things, to gain a clearer picture of how competition in the market actually works and whether circumstances exist that may reduce effective competition. If the review indicates that competition is significantly restricted, the Authority may decide to launch a formal market investigation.

„A power to conduct market investigations was introduced [into Norwegian competition law] last year and is intended to address competition problems that do not arise from breaches of competition law. The review will provide us with a robust and up-to-date picture of the banking market and enable us to assess whether there is a basis for proceeding with a market investigation,“says Mads Magnussen, Director General of the Norwegian Competition Authority.

Mads Magnussen, Director-General of the Norwegian Competition Authority

During the market investigation, the Norwegian competition authority may already take measures to improve competition in the market.„Experience from other countries shows that such interventions can deliver significant benefits to consumers.“

„In previous examinations of the banking market, we have observed, among other things, low customer mobility, various barriers to entry and bank growth in the market, and market characteristics that may facilitate the coordination of interest rate levels. This has raised concerns that competition between banks has not been sufficiently vigorous. We will now conduct new analyses to assess the current competitive situation,“says Line Djupvik Andersen, project manager at the Norwegian Competition Authority.

Line Djupvik Andersen, project manager at the Norwegian Competition Authority.

The Icelandic Competition Authority will closely monitor the aforementioned investigation by the Norwegian competition authority into the banking market in Norway and will use its findings in its supervision here in Iceland.

Facts of the case:

Market analysis

• A market review is a comprehensive examination of factors that may affect competition.
• The focus is on market conditions rather than individual companies.
• The aim is to analyse how competition in the market works and what factors may hinder it.
• Such an assessment is the first step towards a market research.

Market research

• Market research is a targeted investigation into specific aspects of the market that limit competition.
• During a market investigation, the Norwegian competition authority may take measures to improve competition in the relevant market.
• A market study does not necessarily imply that a breach of competition law has occurred.
• Procedures for market investigations are enshrined in competition law, including rules on procedure and statutory time limits.
• The Icelandic Competition Authority has powers of this kind, see c-item of the first paragraph of Article 16. competition law, see also rules 490/2013.