On 11 March 2021, the Competition Appeal Tribunal confirmed
The decision of the Competition Authority annulling the merger of Icelandic Diagnostic Imaging
ehf. and Medical Imaging ehf. The merging parties appealed the decision
to the courts from the Competition Appeals Tribunal and with its judgment today confirmed
Decision of the Reykjavík District Court's Appeals Committee.
The activity of the merger party consists of providing
medical imaging services, which include, for example,.
computed tomography scans, X-rays, ultrasound, magnetic resonance imaging and
Shadow research. The activity is of great significance for healthcare services on
the country. A disruption to competition in this area may be liable to reduce
quality and increase the cost of healthcare services.
With the merger, the number of competitors in the market would have been reduced from
three-to-two and the combined market share of the merger partners has become between 80 and 100 per cent,
depending on which service component is concerned.
The case concerned several issues which it is appropriate to
to elaborate further on:
The merger parties firstly based their argument on the fact that the merger rules
competition law does not extend to the activities of the merging parties, which is based on
largely under a contract with the National Health Insurance of Iceland for healthcare services.
The judgment confirms the conclusion of the Competition Authority and the Appeal Board that
the merger rules of competition law apply to mergers of undertakings in this field, provided that
it is specifically stated in the legislative materials for the Act on Patient Insurance that
Competition law is intended to apply to the market conduct of the contracting parties to the National Health Service.
of Iceland.
The merging parties further relied on the fact that
The Competition Authority had not made a decision in the case within the legally prescribed deadlines.
and therefore there was no authority to annul the merger. This position was
the merger partners was based in particular on the fact that while the Competition Authority had
Changes had been made to the provisions of the Competition Act for the administrative case to be heard.
for an extension of time to investigate the merger. The District Court did not agree.
The merger parties further relied on the fact that the market
the matter was not correctly defined. In the decision of the Competition Authority, it was laid
on the basis that the geographical market in question was the capital region, but
The merger parties therefore disagreed, arguing that the entire country was one
market. The merger parties then based their case on the fact that diagnostic imaging services provided
Hospitals should be considered part of the market in question. The appeal board agreed with the argument
the Competition Authority in this respect, particularly with reference to the fact that users
The service generally does not provide cross-border service and is limited.
Substitutability would be between imaging services provided within and outside
hospitals. The County Court agreed with this.
The Regional Court ultimately confirmed that assessment.
the competition authorities that the merger had created a dominant position in the market or
strengthened, or competition is otherwise significantly distorted. Had that
had a detrimental effect on the existing competition in the defined market
of the case. In that context, regard was had to the reduction in competitors from three to two and
High market share of the merger partners.
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