Report of the Nordic Competition Authorities – Competition and Economic Crises

It is particularly important in times of economic hardship to defend competition and to apply effective and strict competition rules for this purpose. The solution to economic crises does not lie in reducing or softening the oversight of restrictions on competition.

This is the main conclusion of the Nordic competition authorities in their joint report, „Competition Policy and Financial Crises – Lessons Learned and the Way Forward”. The report was presented at a press conference in Reykjavík with the directors of the authorities today, as the annual meeting of the Nordic competition authorities is currently taking place in Iceland.

Effective competition and competition policy is one of the cornerstones of the Nordic welfare model.

The competition authorities of Iceland, Denmark, Finland, Greenland, Norway and Sweden have assessed the impact that economic hardship, both now and in the last century, has had on national competition policy, and what conclusions can be drawn from these effects. As the Nordic countries have relatively small and open economies, their international competitiveness is essential to protect and maintain the Nordic welfare model. Economic growth and innovation are among the prerequisites for preserving and enhancing that competitiveness. This objective is best achieved by promoting effective competition.

Effective competition is important to accelerate economic recovery and create the foundation for job creation and prosperity.

The financial crises of the past teach us that measures aimed at maintaining and strengthening effective competition help nations to recover from economic downturns more quickly than otherwise. It can also be seen that measures involving restrictions on competition hinder economic recovery and prolong recessions. Past economic crises provide examples of protectionism and the weakening of competition rules being adopted with the aim of mitigating the negative effects of economic shocks. However, research shows that such measures have had the opposite effect, i.e. prolonging the downturn. Drawing on this experience, the Nordic competition authorities place great emphasis on ensuring that measures intended to tackle the economic crisis take their effects on competition into account. This should be done from the outset, so that measures which harm competition do not have to be unwound, causing long-term damage to consumers and society as a whole.

Quotes from the CEO of the Nordic supervisory authorities on the occasion of the report:

„History shows that measures which reduce competition actually exacerbate economic difficulties and prolong the recession beyond what would be necessary. Therefore, we must ensure that measures taken to tackle the crisis are designed in such a way that they do not reduce competition.” (Knut Eggum Johansen, Director General of the Norwegian Competition Authority)

„Strong competition is essential for the economy, also in times of crisis. Effective competition promotes a faster economic recovery. Competition ensures that business and production move from inefficient to efficient companies, thereby contributing to economic growth.“ (Agnete Gersing, Director General of the Danish Competition Authority)

„In these circumstances, it can be tempting for large companies to exploit, and even abuse, a dominant position in the market. The competition authorities in the Nordic countries will not tolerate breaches of competition law.” (Dan Sjöblom, Director General of the Swedish Competition Authority)

„The Nordic vision on competition matters, now being publicly presented, must play a significant role in the development process facing the Icelandic people. While the focus aligns well with the work the Competition Authority has been engaged in over the past few months, the Authority is greatly strengthened by the joint analysis that the Nordic governments in this field have now taken the initiative to undertake.” (Páll Gunnar Pálsson, Director of the Competition Authority)

The report can be accessed here. A short summary is attached in Icelandic. here. An Icelandic translation of the report's conclusions is available. here.