Acquisition of Myndgreiningar ehf. of Læknisfræðilegri myndgreiningu ehf. and Íslenskri myndgreiningu ehf.

The Competition Authority has been reviewing the acquisition by the newly established company, Myndgreiningar ehf., of Læknisfræðilegri myndgreiningu ehf. and Íslenskri myndgreiningu ehf. The activities of the merging companies consist of providing medical imaging services, which include, among other things, computed tomography (CT) scans, X-ray examinations, ultrasound, magnetic resonance imaging (MRI) and scintography. Medical Imaging offers a wide range of imaging services, as well as specialised coronary angiography, and operates three sites. Íslensk myndgreining provides all general imaging examinations, but the main focus of the company's operations is on musculoskeletal examinations. Íslensk myndgreining operates a single site.

The Competition Authority concluded that the market relevant to this case is the market for outpatient diagnostic imaging in the capital region. The proposed merger would have reduced the number of competitors in the defined market from three to two, with seriously detrimental effects for both payers and users of the service. With reference to the detailed discussion in the decision, it is the conclusion of the Competition Authority that the proposed merger would lead to the creation or strengthening of a dominant position, or otherwise significantly distort competition, in accordance with Article 17 of the Competition Act. clause c of the Competition Act.

It is the conclusion of the Competition Authority that the purchasing power of the National Health Insurance Fund will not offset the concentration and economic strength that the merged company will have. As can be inferred from the high market share of the merging parties, the barriers to market entry and the limited surplus capacity of other players, the merging parties would have possessed considerable bargaining power in negotiations with the National Health Insurance Fund had the merger gone ahead. The merging parties have argued that operational efficiencies in the combined company will deliver benefits to the consumer in the form of better technology and service. The investigation concludes that the merging parties have not demonstrated to a sufficient degree that the consumer benefits from the efficiencies resulting from the merger would outweigh the restrictions on competition that the merger would entail.

In the opinion of the Competition Authority, it is very important that the application of competition law protects competition in this area. Had the merger under consideration in this case gone ahead, it is clear that competition in diagnostic imaging services would have been seriously harmed.