Rules on the market investigations carried out by the Competition Authority

SECTION I

Scope of
application and objective of market investigations.

Article 1 – Scope of application

These rules apply to investigations
into competition in a specified market, partly or wholly, and are carried out
on the basis of Item c of Article 16(1) of the Competition Act, cf. also
Article 16(2) of the Act. The investigation is directed toward finding out
whether action need be taken against circumstances or conduct which prevents,
limits or affects competition to the detriment of the public interest. Such
actions may be directed at the companies that operate in the market in
question.

Circumstances according to the first
paragraph means, among other things, factors connected to the attributes of the
market concerned, including the organisation or development of companies that
operate in it. Conduct according to the first paragraph means all forms of
behaviour, including failure to act, that are in some way detrimental to market
competition without being in violation of the Act’s prohibiting provisions.

If necessary, a market investigation can also
involve the actions of public entities that have an impact on the market under
examination, cf. Item c of Article 8(1) and Item b of Article 16(1) of the
Competition Act.

Article
2 – Object of market investigations

The object of market investigation
is to identify possible competitive restrictions and improve the competitive
environment in markets where there is reason to expect that circumstances or conduct
are present which prevent, limit or have harmful effects on competition to the
detriment of the public interest. Such circumstances or conduct that limit the
efficiency of markets may include extensive concentrations in the market in
question, considerable hindrances on the ability of new competitors being able
to begin operations or small competitors strengthening their position. This
also includes the actions or failure to act by companies or public bodies which
reduce the efficiency of markets.

Indications of such circumstances or
conduct as described in the first paragraph and other aspects that give rise to
an investigation may include the following:

1. Activity
   or organisation in a market that appears to facilitate the harmful tacit
   collusion of companies in an oligopolistic market.
2. The
   price, services, quality and other competitive aspects that provide an
   indication of the limited function of the market.
3. The
   development and organisation of a company with an extremely strong position in
   a market that may significantly limit the competitive controls that competitors
   can provide.
4. Disruption
   to competition that seems to be due to ownership and management ties between
   companies.
5. Anti-competitive
   discrimination of competitors by public authorities.
6. Fees
   and other costs that may limit customer options of transferring their business
   from one company to another.
7. Lack
   of information or unclear terms that may work against customers transferring
   their business from one company to another.
8. Insufficient
   access for companies to facilities that are necessary to enable them to compete
   efficiently in the market in question.

SECTION
II

Preparations and beginning of market investigation.

Article 3 – Beginning of market investigation

The Competition Authority performs
market research on its own initiative. Reasoned complaints, suggestions and
views of stakeholders and the public can form the basis for market
investigation but does not grant complainants an independent position of
involvement.

When assessing whether to initiate
market research, the following should be kept in mind:

1. Whether
   there is a reasoned suspicion of circumstances or conduct which prevents,
   limits or affects competition to the detriment of the public interest;
2. The importance of the market in
   question for consumers and the economic sector;
3. Indications and earlier cases that
   relate to competition restrictions in the market;
4. Probable direct and indirect effects
   of competition restrictions on consumers;
5. Estimated cost of investigation;
6. The prioritisation of the
   Competition Authority; and
7. Funding
   allocated to market investigations.

Article
4 – Investigative
schedule

The Competition Authority prepares a
plan on the arrangement of market investigation as the basis for the decision
for an investigation. The plan shall at least address the following:

1. The markets to which the
   investigation is to be directed.
2. Who is operating in the market in
   question.
3. Those
   circumstances or conduct that the Competition Authority considers necessary to
   investigate on the basis of Item c of Article 16(1) of the Competition Act.
4. The organisation of information
   collection at the beginning.
5. The
   timeframe for the investigation, including when information gathering is to be
   completed and when the initial assessment report is to be presented.

Article
5 – Decision making, project management
and consultation

The Board of Directors of the
Competition Authority shall discuss the investigation plan according to Article
4 and confirm it. The confirmation of the investigation plan heralds the
initiation of the market investigation.

On having received the proposal of
the Managing Director of the Competition Authority, the Board of the Authority
is authorised to appoint a consultative committee for each market
investigation. The role of the consultative committee is to provide professional
advice and assistance relating to the market investigations of the Competition
Authority. The consultative committee shall consist of at least two outside
parties.

The participants of the consultative
committee are subject to all job responsibilities according to the
Administrative Procedures Act, the Competition Act and the Civil Servants’
Rights and Obligations Act, including confidentiality. In confirmation thereof,
they must submit a signed declaration thereto. The work of the consultative
committee is a part of the internal work of the Competition Authority and
documentation relating to the group considered working documents according to
Article 16 of the Administrative Procedures Act No. 37/1993.

The Managing Director of the Competition
Authority presents an investigation schedule to the Board and bears
responsibility and manages the execution of the market investigations in other
respects. The Managing Director is the responsible party as regards market
investigations in external relations.

SECTION III

Procedure.

Article
6 – Notification of the beginning of a
case and delays

The parties against whom the
investigation is directed at its beginning shall be notified of the
investigation. The same applies to parties against whom the investigation may
be directed at a later date. The decision on the beginning of a case shall also
be announced in a press release on the website of the Competition Authority. In
general, the announcement shall state the items specified in Article 4.

If it is foreseeable that there will
be delays from the initial timetable of the investigation according to Item e
of Article 4, the parties to the case must be made aware of the changes to the
timetable. The same shall be done to the press release on the website of the
Competition Authority.

Article
7 – Rules
on proceedings

The parties against whom the
investigation is directed and who may undergo measures according to Article 16
of the Competition Act enjoy the rights provided for in the Administrative
Procedures Act No. 37/1993 and in the rules of the Competition Authority No.
880/2005.

The provisions of the Administrative Procedures
Act and Section III of Rules No. 880/2005 apply as applicable to the execution
of the case involved in the market investigation of the Competition Authority.

Article 8 – Initial
assessment and the gathering of opinions

On completing the collection of
information and assessment of data, a draft result of the market investigation
shall be compiled in a separate initial assessment report. The initial
assessment report shall be sent to the parties against whom it is directed, and
they shall be granted a reasonable deadline to return their written comments
thereto. The report, without confidential information, shall be published. As a
rule, the views of those against whom the result are directed shall also be
published.

After the publication of the initial
assessment report, the Competition Authority shall organise an open meeting
where stakeholders and others shall have the opportunity to submit their views
of the report. The arrangement of the meeting shall be announced in advance.

If the Competition Authority is of the opinion
that an onerous decision may be made in the wake of a market investigation,
including measures to change the conduct and organisation of companies, a
statement of objections shall be issued in connection with the initial
assessment report according to Article 2. The statement of objections shall in
other respects be governed by Article 17 of Rules No. 880/2005 on the
procedures of the Competition Authority.

SECTION IV

End of investigation, etc.

Article
9 – End of
investigation.

On completion of data compilation
and procedures, the Competition Authority shall make a decision on the manner
in which to end the market investigation. The resolution may involve one or
more of the following solutions:

1. Decision
   where the authorisations of Article 16 of the Competition Act to change conduct
   and/or organisation of companies are used.
2. Decision
   where the authorisations of Article 16 of the Competition Act are employed
   against the competitively restrictive practices of public authorities.
3. Special
   investigation initiated of possible violations of the prohibition rules of the
   Competition Act or instructions in the decisions of Competition Authorities.
4. If
   the results of the investigation do not lead to a binding intervention, they
   are stated in a report that is published. The same applies if part of an
   investigation does not lead to a binding intervention. In such cases, the
   Competition Authority may issue an opinion and recommendations in connection
   with the substance of the report.

Article
10 – Board
involvement, etc.

The Board discusses the results of
market investigations which are submitted to it, for approval or rejection,
decisions on the basis of the investigations that involve intervention
according to Item c of Article 16(1) of the Competition Act or other provisions
of the Act.

An investigation, or a part thereof,
that leads to a binding intervention is closed by a decision pursuant to
Section IV of Rules No. 880/2005 on the procedures of the Competition
Authority.

Market investigations, procedures and decisions
in other respects are governed by Rules No. 880/2005 on the Rules of Procedures
of the Competition Authority and the rules of procedure of the Board of
Directors of the Competition Authority No. 902/2011.

SECTION V 

Entry into
effect.

Article 11

These Regulations are adopted on the
basis of Article 8(2) of the Competition Act No. 44/2005 and enter into force
on publication.

The
Competition Authority, 8 May 2013 Páll Gunnar
Pálsson.

B-section – Date of issue: 27 May 2013