Norway: Merger Control

Norwegian competition legislation is based on Act No. 12 of 5 March 2004 concerning competition between undertakings and control of concentrations (the ‘Competition Act’), and Act No. 11 of 5 March 2004 concerning implementation and enforcement of the competition rules of the European Economic Area (EEA) Agreement, etc. (the ‘EEA Competition Act’). This legislation is enforced by the Norwegian Competition Authority (the ‘NCA’), the Norwegian Ministry of Trade, Industry and Fisheries, the Competition Appeals Tribunal and the national Courts. The Competition Appeals Tribunal was established in 2017 and is the administrative appellate body for the NCA’s decisions with effect from 1 April 2017, including in merger cases.

The Competition Act applies to terms, agreements, practices, unilateral conduct and transactions which are liable to have an impact in Norway.  Thus, the NCA may intervene in e.g. anti-competitive agreements concluded outside Norway and foreign-to-foreign transactions insofar as they could affect markets in Norway. Norwegian competition law is, to a large extent, harmonized with EU competition law. Within merger control, the Competition Act was brought in line with the EU Merger Regulation 139/2004 (‘ECMR’) in 2016, when the substantive test under the Norwegian merger control regime was changed from a SLC test (“substantial lessening of competition”) to a SIEC test (“significant impediment of effective competition”).

Notification is mandatory if the turnover thresholds are met; cf. answer to question 6.

Yes, a stand-still obligation applies to all transactions which are subject to a mandatory notification requirement until clearance by the NCA has been granted. Infringements of the stand-still obligation may be sanctioned with administrative fines, of which there are several examples in the NCA’s practice. Derogations from the stand-still obligation are possible in exceptional circumstances, but the NCA has to render a formal decision beforehand. Examples of such exemptions being granted by the NCA are rare. They include e.g. “failing firm” cases where a swift take-over is required to secure continued operations in a bankruptcy scenario.

Furthermore, note that upon further conditions, a derogation from the stand-still obligation is also possible for public bids or series of transactions in securities admitted to trading on a regulated market, such as a stock exchange, by which control is acquired from various sellers.

All concentrations which do bring about a change of control (or a change in the quality of control) are notifiable insofar as the turnover thresholds are met; cf. answer to question 6. A concentration shall be deemed to arise where: (a) two or more previously independent undertakings or parts of undertakings merge; or (b) one or more persons already controlling at least one undertaking or one or more undertakings acquire direct or indirect control on a lasting basis of the whole or parts of one or more other undertakings. Full-function joint ventures are notifiable. Asset purchases are also notifiable insofar as the assets constitute a business with a lasting market presence to which a turnover can be clearly attributed. In its decisional practice, the NCA has applied a wide definition of the concept of a “concentration.”

Control is obtained through rights, contracts or any other means, which either separately or in combination, confer the possibility of exercising decisive influence on an undertaking by: (a) ownership or the right to use all or parts of the assets of an undertaking; or (b) rights or contracts which confer decisive influence on the composition, voting or decisions of the organs of an undertaking. Also negative control (e.g. veto rights to block strategic decisions) is covered.

Minority transactions which do not bring about a change of control are not covered by the mandatory notification requirement. Note, however, that there may be a change of control even if less than 50 % of the shares change hands based on e.g. a shareholder’s agreement setting out that the minority buyer has an option to veto strategic decisions. Furthermore, the NCA may order a filing obligation even if no change of control takes place, e.g. in acquisitions of minority interest. Such decisions must be rendered by the NCA at the latest three months after the acquisition has become public, or the agreement was entered into. In 2019, the NCA intervened for the first time with a conditional clearance decision in a minority interest case.

The NCA has introduced special notification requirements for four undertakings in the grocery market. These undertakings must give notice to the NCA of any transaction, including minority interests. After giving notice, the NCA must decide within 15 days whether to order a filing obligation.

A concentration must be notified to the NCA when: (a) the undertakings concerned have a combined annual turnover in Norway above NOK 1 billion; and (b) each of at least two of the undertakings concerned have an annual turnover in Norway of NOK 100 million or more.

These jurisdictional thresholds apply to all sectors.

Note that the NCA may order the acquiring party to notify transactions below the thresholds by formal decision up to three months after the acquisition has become public, or the agreement was entered into. Such orders are relatively rare but occur from time to time. Furthermore, the NCA has imposed a general obligation upon several individual companies active in sectors where competition is thought to be limited, to inform the NCA of all of their concentrations.

The relevant turnover for the assessment of the notification requirement will be the annual turnover in the preceding fiscal year. This is the case even if it is clear that the turnover in the current fiscal year will be higher (or lower) due to organic growth or decline. On the other hand, the turnover in the preceding fiscal year shall be adjusted to take into account mergers or de-mergers taking place before the concentration, but after the preceding fiscal year was closed.

Only turnover in Norway is relevant for calculating the thresholds. Turnover is generally allocated to the country where the product is actually delivered or where the service is actually provided, which is often, although not always, also the place where the customer is located. Where products and/or services are delivered or provided in Norway, the turnover generated from those products and/or services must thus generally be allocated to Norway, regardless of the fact that the headquarters or offices of the seller and/or the buyer are located elsewhere.

Furthermore, only turnover by the undertakings concerned is relevant for calculating the thresholds. In a merger, the undertakings concerned are the entire corporate structure of the merging parties. In an acquisition, the undertakings concerned are the buyer’s entire corporate structure and the target company, including also controlled subsidiaries (if any) of the target company. For joint ventures, note that the turnover of the entire corporate structure of the joint venture’s parent companies are also taken into account for calculating the thresholds.

Yes, the official exchange rate of Norges Bank (the Central Bank) is applied by the NCA.

The creation of a new joint venture performing on a lasting basis all the functions of an autonomous economic entity, i.e. the creation of a so-called full-function joint venture, constitutes a notifiable concentration where the turnover thresholds are met; cf. answer to question 6. The acquisition of joint control over an existing business is also notifiable, given that the buyer did not control the business previously, or there is a change in the quality of control.

No.

Only turnover in Norway is relevant for calculating the thresholds; cf. answer to question 7.

N/A

The SIEC test (“significant impediment of effective competition”) applies across all sectors.

No.

Yes.

No, but the stand-still obligation applies until final clearance by the NCA.

Note, however, that for special cases concerning public bids or series of transactions in securities admitted to trading on a regulated market, such as a stock exchange, by which control is acquired from various sellers, one of the conditions for derogating from the stand-still obligation is that the notification immediately is filed with the NCA; cf. answer to question 3.

The NCA has accepted notifications on the basis of letters of intent in previous cases. The NCA will assess the likelihood of whether an agreement is binding. As the main rule, for the NCA to accept a notification before the transaction agreement has been signed by the parties, all material aspects of the transaction must, to a large extent, be final, e.g. the scope and structure of the transaction at issue. In practice, most transactions are notified at or shortly after signing.

Yes, pre-notification discussions are common in more complex matters, but not in the more straightforward cases. While not strictly required, pre-notification discussions in complex matters are encouraged by the NCA as it enables the notifying party to address specific topics that the NCA might want to focus on, e.g., a complex factual matter, areas/markets where there are potential issues etc. and to clear away any misunderstandings at the earliest possible stage, thus ensuring a more stringent and efficient procedure after the notification has been filed.

The extent and duration of pre-notification discussions vary, from brief informal discussions to several weeks with drafts being shared with the NCA’s case team in the most complex matters.

The NCA’s review process is split into two basic phases. Phase I lasts up to 25 business days after a complete notification has been filed. The large majority of transactions are cleared in Phase I. Phase II can go beyond 70 business days after a complete notification has been filed.

The more detailed timeline is as follows:

Phase I: 25 working days after notification, the NCA must either clear the transaction or issue a Phase II notice (extended to 35 days if the parties offer remedies in Phase I within the first 20 working days, which could open for a Phase I conditional clearance).

Phase II: 70 working days after notification, the NCA must either clear the transaction or issue a draft notice of intervention (‘statement of objections’) against the transaction to the notifying party (extended correspondingly if the parties offer remedies between the 55th and 70th working days after receipt of the notification; e.g. will be 71 working days if remedies are offered on day 56; 72 working days if remedies are offered on day 57 etc.)

Phase II after NCA’s statement of objections: The parties will have 15 working days (85 working days from notification) to submit comments to the statement of objections. When the comments have been submitted, the NCA then has another 15 working days (100 working days from notification) to make its final decision, which may be a full clearance, a conditional clearance decision with remedies, or an outright prohibition.

The basic timetable will not start until the notification is deemed complete by the NCA. Lack of replying to the NCA’s information requests in a timely manner after the notification has been filed may freeze the timetable. The timetable may only be extended if the NCA decides to open Phase II proceedings; see answer to question 19. Finally, towards the end of Phase II proceedings, e.g. where the parties have offered new (or amended) remedies after the NCA’s statement of objections, the basic timetable may be extended with up to 30 working days.

Yes, in simpler deals, the NCA often clears before the statutory deadline. Also, pre-notification contact may lead to shorter case handling time and increase the likelihood of Phase I clearance.

The party or parties acquiring control are responsible for submitting the filing.

The information required in the filing form depends on whether the notification must be filed as a full notification, or instead can be filed as a simplified notification. A simplified notification can be filed e.g. in transactions where there is none or insignificant overlapping activities, and thus where the joint market share of the undertakings concerned remains low (horizontal overlap below 30 % market share post transaction and vertical overlap below 20 % post transaction).

A full notification must include at least: (a) name, address, organization number and contact information of the undertakings concerned; (b) information about the business rationale and nature of the concentration; (c) descriptions of the undertakings concerned; (d) descriptions of horizontally and/or vertically affected markets; (e) lists of the five most important competitors, customers and suppliers of the undertakings concerned on markets where they have overlapping activities; (f) description of efficiency gains (if any); and information about whether the transaction is subject to notification to competition authorities also in other jurisdictions.

In addition, the notifying party must include a reasoned proposal for a non-confidential version of the notification with suggested redactions insofar as the notification contains business secrets. Since this is almost always the case, this is in practice, an additional form requirement.

Full notifications must include copies of: (a) the transaction agreement, e.g. SPA, including appendices; and (b) latest available annual reports/accounts for the undertakings concerned.

Simplified notifications do not need to include a copy of the transaction agreement, and copies of the latest annual reports/accounts for the undertakings concerned can be skipped if these are publically available in a public registry (in which case a simple reference to that registry will do).

No.

Yes, on the NCA’s website.

Yes, market testing is common.

Full access to the case file is granted to third parties requesting access, with the exception of internal NCA correspondence and confidential information (business secrets) that is not in the public domain. Examples of typical business secrets, which will remain confidential and redacted in non-confidential versions, are the transaction agreement; strategy documents; list of competitors, customers, and suppliers; estimations on market volumes and market shares etc.

Yes. While the NCA does not directly participate in the European Competition Network (“ECN”), since Norway is not an EU Member State, the EFTA Surveillance Authority (“ESA”) and the national competition authorities of the EEA/EFTA States, including the NCA, may participate in ECN meetings, although only for the purpose of discussing general policy issues; cf. Protocol 23 to the EEA Agreement. Furthermore, ESA and the EEA/EFTA States have established their own competition network for cooperating on enforcement of cases that fall within ESA’s domain.

In addition, the NCA has entered into several inter-agency agreements with other national competition authorities, such as with the national competition authorities in the Nordic countries. The NCA may exchange information with the national competition authorities in other countries in order to fulfill national obligations set out in international agreements. However, any further disclosure of the information by the recipient authority must be authorized by the NCA, and the information may only be used for the specific purpose defined. In 2019, the national competition authorities of Norway, Sweden, Denmark, Finland and Iceland entered into an agreement with the purpose e.g. of cooperating in behavioral cases and merger cases investigated by more authorities and to assist each other with information etc. where so asked.

Structural remedies and “fix it first” solutions (e.g. an up-front divestment or asset sale) are the most common, although behavioral remedies (e.g. an obligation to provide access to input on FRAND terms) have been accepted in numerous cases. There is, however, a general tendency and development in the NCA’s practice of preferring structural and “fix it first” remedies over behavioral remedies, although behavioral remedies are still accepted in individual cases.

The NCA does not have powers to suggest or impose remedial actions. Accordingly, the merger control procedure underlines that it is for the parties to propose remedies in the form of binding commitments. The parties are encouraged to do so as early as possible, but remedies may be offered at any time. Note that offering remedies at certain stages of the procedure may prolong the timelines; cf. answer to question 19. The NCA can either accept or refuse the remedied offered by the parties. The NCA cannot issue a conditional clearance on remedies that go beyond or differ from what the parties have offered. Thus, insofar as the NCA does not find that the proposed remedies are sufficient, new remedies must be offered by the parties.

The underlying principle is that the NCA must either clear the transaction as soon as possible with the remedies suggested by the parties, or present a statement of objections. At the end of the timelines, if the remedies are considered by the NCA to be insufficient to do away with the competitive concerns in question, the NCA is under an obligation to prohibit the transaction.

Administrative fines are imposed for a failure to notify or breach of the stand-still obligation. The range of the administrative fine depends on the specific circumstances, with a statutory limit of up to 10 % of the undertaking’s (or corporation’s) annual turnover in the preceding fiscal year.

Administrative fines are imposed for providing incomplete and/or misleading information. The range of the administrative fine depends on the specific circumstances, with a statutory limit of up to 1 % of the undertaking’s (or corporation’s) annual turnover in the preceding fiscal year.

Yes. However, after the Competition Appeals Tribunal (administrative body) was established with effect from 1 April 2017, appeals against the NCA’s decisions must first be brought before the Appeals Tribunal. It is only where the Appeals Tribunal does not render a decision within 6 months after the appeal was lodged that the parties may choose between waiting for the Appeals Board’s decision or to bring the case before the courts directly without waiting for the decision.

The decision of the Appeals Tribunal itself may also be appealed to the court by the parties. Note that this is only an option for the parties, and not for the NCA, and that such appeals are brought directly before the Gulating Court of Appeal in Bergen, which is a court of second instance.

In 2022, a decision by the NCA to block the Dnb/Sbanken merger was overturned by the Competition Appeals Tribunal (Decision 2021/2185 DNB Bank ASA). As only the parties to the transaction may appeal the Tribunal’s decisions to the courts, the decision is final.

In March 2020, the NCA ordered an acquiring party to notify a merger below the thresholds in the market for online distribution of used cars (Finn/Nettbil merger case). The NCA ordered notification after the merger had been completed. In November 2020, the NCA prohibited the merger, and ordered the acquiring party to sell its shares in the acquired party to a buyer approved by the NCA. The Competition Appeals Tribunal upheld the decision in May 2021. The Gulating Court of Appeal overturned the decision in March 2022, finding that the undertakings were not active in the same product market. The Court assessed that Finn could raise prices without losing sales, in contrast with the NCA/Tribunal, which pointed to internal documents at Finn and at Nettbil stating that they considered each other as competitors. The Appeal Court’s judgment has been appealed to the Supreme Court, which has accepted to hear the case. We expect that mergers below the thresholds in concentrated markets will continue to be scrutinized and followed closely.

In the abovementioned Dnb/Sbanken merger, the Tribunal found, in contrast to the NCA, that Sbanken did not single itself out as exerting large competitive pressure as a so-called “maverick contender.” Thus, the blocking of the merger was overturned.

The NCA is more concerned with closeness of competition than market concentration as such. Local markets are often scrutinized, and economic analysis is becoming increasingly important. The SIEC test and a consumer welfare standard is applied. While efficiency gains are often difficult to argue in practice due to extensive documentation requirements, the NCA has approved cases based on a pure efficiency gains defense, and although rare, the matter signals that a refined in-depth analysis may be essential to obtain clearance in more complicated matters.

The NCA has maintained and stepped up its close scrutinization of key sectors and has prolonged the duty imposed upon several individual undertakings of informing the NCA about all concentrations. This applies to specified undertakings active in the following sectors: Fuel; energy; waste; groceries; locksmiths; newspapers; broadband; home alarm systems; laundry; garden centres; concrete and accounting systems. In fact, most of the NCA’s merger control decisions recently have been decisions imposing a notification duty (after having been informed by those subject to an information duty) as well as fining decisions for non-compliance with the duty to inform. Specifically for groceries, the notification obligation also covers minority interest.

In 2020, the NCA issued a considerable fine for incorrect or incomplete information in a notification. In 2021, the Competition Appeals Tribunal set aside the decision, finding that the NCA had not adequately investigated whether the notification contained incorrect or incomplete information. The case was sent back to the NCA, which decided not to pursue the case further.