The Legal 500

Earlier this year the Competition Law Reform Commission, appointed by the Norwegian Government, delivered its proposal on a new competition act.

The commission proposes several changes, including new rules on when a merger or an acquisition (i.e. "concentrations") should be notified to the Norwegian Competition Authority (the NCA). The proposed changes shall contribute to a more effective merger control, in that undertakings in Norway can relate to notification rules more consistent with the rules in Norway's neighbouring countries and the rest of Europe.

Under the current Norwegian competition law regime, concentrations  are subject to notification if the undertakings concerned have a combined annual turnover  in Norway exceeding 50 000 000 NOK (approximately 6 600 000 EUR). However, if only one of the undertakings concerned has an annual turnover in Norway exceeding 20 000 000 NOK (approximately 2 600 000 EUR), notification is not required. By comparison the equivalent thresholds in Denmark are 900 000 000 DKK (approximately 121 000 000 EUR) and 100 000 000 DKK (approximately 13 500 000 EUR) respectively, and in Sweden 1 000 000 000 SEK (approximately 113 000 000 EUR) and 200 000 000 SEK (approximately 22 600 000 EUR) respectively. By this the Norwegian thresholds must be considered very low, not only compared to Denmark and Sweden, but also compared to large parts of the rest of Europe.

These low thresholds force both market operators and the NCA to spend unnecessary amounts of time and resources on a number of concentrations that do not have significant anti-competitive effects on the relevant markets. As mergers and acquisitions are prohibited from being implemented before they have been notified to and reviewed by the NCA, any concentration subject to notification has to be put on hold until the NCA finishes its proceedings. Such a scenario creates uncertainty for the undertakings concerned, notwithstanding the undertakings’ nationality. Since revenue in Norway is the relevant basis for the obligation to notify, also international undertakings with only modest revenues in Norway will have to notify a concentration to the NCA. In an internationalized and transboundary business community, where cross-border cooperation between the European competition authorities is becoming increasingly relevant, there is a need for harmonisation and predictable competition law enforcement across Europe. On this background it comes as no surprise that the Competition Law Reform Commission now proposes a significant increase in the Norwegian thresholds.

When assessing the level of the new thresholds, the commission emphasizes that the thresholds should not differ particularly from those in our neighbouring countries, referring to the above-mentioned thresholds in Denmark and Sweden. The commission also points out that the NCA’s statistics show that those concentrations that may cause competition law concerns (i.e. where the NCA orders the submission of a so-called complete notification, which shall contain considerably more detailed information on the concentration than a standardized notification) will still be caught when elevating the thresholds to the levels of Denmark and Sweden. After an overall assessment the commission proposes that the threshold for total, annual revenue in Norway should be increased from 50 000 000 NOK to 1 000 000 000 NOK (approximately 133 000 000 EUR), while the threshold for individual revenue should be increased from 20 000 000 NOK to 100 000 000 NOK (approximately 13 300 000 EUR). According to the commission this could lead to 70% fewer standardized notifications to the NCA. Such a reduced workload could free up the NCA’s resources and contribute to increased control of those concentrations that may impede effective competition on the relevant markets. Also, several mergers or acquisitions may be implemented as soon as the agreement is signed, without the statutory delay of 15 working-days. Thus, significantly increased turnover thresholds for notification would be one step towards a more effective competition law enforcement, which would also benefit international undertakings doing business in Norway.

The Ministry of government administration, reform and church affairs aims at presenting a bill before the Norwegian Parliament in Spring 2013.