RESTRICTED
WORLD TRADE WT/WGTCP/W/31
15September 1997
ORGANIZATION(97-3657)
Original: English Working Group ontheInteraction
between Trade andCompetition Policy
COMMUNICATION FROM NORWAY
Thefollowing communication, dated 10September 1997, hasbeenreceived fromthePermanent
Mission ofNorway withtherequest thatitbecirculated toMembers.
_______________
THE NORWEGIAN COMPETITION LEGISLATION
1. Introduction
Competition inNorway isgoverned byanumber ofactsandregulations. TheActof
11June1993 relating tocompetition incommercial activity (theCompetition Act)came intoforce
on1January 1994. TheActof11June1993 relating toprice policy (thePrice Policy Act), came
intoforce onthesame date. ThisActprovides authorization forprice regulation andcontains a
prohibition onunreasonable prices. Under theAgreement ontheEuropean Economic Area(theEEA
Agreement), Norway isobliged toincorporate thecompetition rulesintheAgreement intodomestic
legislation, andthishasbeendonethrough thefollowing special actsandregulations:
TheActof27November 1992 relating toImplementation inNorwegian Lawofthe
Main Agreement oftheEuropean Economic Area (EEA) etc., theActof
27November 1992 relating toCompetition Rules intheEEA Agreement etc.,the
Regulation of4December 1992 onSubstantive EEA Competition Rules andthe
Regulation of4December 1992 onProcedural EEA Competition Rules etc.These
ActsandRegulations became effective fromtheentryintoforceoftheEEAAgreement
on1January 1994.
2. ThePurpose oftheCompetition Act
Thepurpose oftheActis"toachieve efficient utilization ofsociety 'sresources byproviding
thenecessary conditions foreffective competition". TheAct,thus,focuses onthebenefits tosociety,
notonthose ofindividual actors inthemarket.
TheActisbased ontwoprinciples: aprohibition against horizontal practices generally
considered tobeanti-competitive andlegal power tointervene inindividual cases against other
anti-competitive practices.WT/WGTCP/W/31
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3. TheCompetition Authorities
TheNorwegian Competition Authority1isresponsible fortheday-to-day supervision of
competition. Oneofitstasks istocallattention totherestraining effects oncompetition ofpublic
measures.
TheCompetition Authority isasubordinate agency oftheMinistry ofNational Planning and
Coordination, which hasaseparate department dealing withcompetition policy, theDepartment of
Competition Policy. TheMinistry alsoserves astheappellate bodyforcomplaints against individual
decisions made bytheAuthority.
4. TheScope oftheCompetition Act
TheCompetition Actisgeneral inscope. Itapplies toanykindofcommercial activity,
irrespective ofthetypeofgoods orservices involved andofwhether itisprivate orcarried outby
central orlocalgovernment authorities. However, itdoesnotapply towage orworking conditions.
TheCompetition Authority andcertain sector-specific authorities haveoverlapping jurisdiction.
Thisissue isdealtwithbelow under section 9.
5. Substantive Provisions
5.1 Prohibitions
TheCompetition Actprohibits collaboration onprices, mark-ups anddiscounts inconnection
withthesaleofgoods andservices. Itshould benoted thattheprohibition doesnotcover purchases.
Suppliers arenotallowed tofixorseektoinfluence prices, discounts ormark-ups fortherecipient 's
saleofgoods orservices. Nevertheless, anindividual supplier maystipulate recommended prices for
therecipient 'ssaleofgoods orservices oncondition thatitisexplicitly stated thattheprices are
recommended.
Collaboration between undertakings inconnection withtenders isprohibited.
Market sharing intheformofareadivision, customer division, quota distribution, specialization
orlimitation ofquantity isprohibited. Anindividual supplier may, however, enterintoanagreement
onmarket sharing with, ordetermine market sharing for,hisrecipients, forexample byexclusive
agreements orselective distribution systems.
5.1.1 Exceptions
TheActprovides forthefollowing exceptions from theprohibitions:
Firsthandsales, i.e.salesfromproducers/importers within Norway ofagricultural, forestry
andfisheries products areexempted. Theprohibition against collaboration inconnection withtenders
does, however, apply inthese sectors.
1TheCompetitionAuthorityhassevenregionalofficesandatotalstaffof110persons,excludingadministrative
staff. In1996 theAuthority dealt withatotalof189cases concerning prohibitions and150applications for
individual exemptions, ofwhich 130were granted. TheAuthority assessed 57cases ofpossible intervention,
ofwhich three resulted inintervention. Inthesame yeartheAuthority registered atotalof696mergers or
acquisitions. 46mergers were scrutinised, andtheAuthority decided tointervene inoneofthem.WT/WGTCP/W/31
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Collaboration onprices inconnection withindividual projects, andsubmitting ajointtender
orjointoffer forthesupply ofgoods orservices forindividual projects ispermitted.
Price collaboration andmarket sharing arepermitted between owner andcompany where the
owner owns more than50%ofstocks, shares orcorresponding equity stakes giving voting rights.
Theprohibitions donotapply torestraints thataredetermined between licensor andlicensee
inanagreement stipulating thelicensee 'srighttoutilisation ofaregistered patent ordesign.
5.1.2 Individual exemptions
TheCompetition Authority maygrant general orindividual exemptions fromtheprohibitions
given thatcertain specific criteria arefulfilled, i.e.because therestrictive practice inquestion may
leadtoincreased competition, promote efficiency, orhaslittlecompetitive significance, orifthere
arespecial grounds fordoing so.
5.2 Interventions
TheCompetition Authority mayintervene against agreements, terms ofbusiness andother
actions thatmayrestrict competition andarecontrary tothepurpose oftheAct. TheCompetition
Authority mayalsoprohibit methods thatmaintain orstrengthen adominant position inthemarket,
refusals todealorlimitations ofcustomer 'schoices andrestraints thatunduly increase thecostof
production, distribution orsales, orkeepcompetitors outofthemarket.
5.3 Merger control
TheCompetition Authority mayintervene against mergers oracquisitions ofenterprises.
Normally anyintervention musttakeplace within sixmonths ofafinalagreement onamerger oran
acquisition. Thisdeadline may, however, beextended under special circumstances. Anagreement
onamerger orpurchase ofshares may, onavoluntary basis, bereported totheCompetition Authority
inorder toascertain whether theAuthority willintervene. Insuchcases theAuthority must decide
within three months whether ornottointervene.
5.4 Invalidity
Agreements which areprohibited under theCompetition Actareinvalid.
5.5 Price labelling
Pursuant totheAct,retailers selling goods toconsumers mustprovide information onprices
thatcanbeeasily seenbythecustomers. Thesame applies tothesaleofservices toconsumers.
6. Enforcement andsanctions
6.1 Legal instruments
TheCompetitionActincludesprovisionsobligingundertakingstoprovideinformationdemanded
bytheCompetition Authority. There areother enforcement provisions relating tothesecuring of
evidence andperiod penalty payments. Inconnection withasuspected infringement oftheCompetition
Act,theCompetition Authority candemand access topremises inorder tosearch forevidence.
Permission forthisisgranted bythecourt ofexamination andsummary jurisdiction.WT/WGTCP/W/31
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Infringements oftheprohibition provisions arepunishable byfines, imprisonment or
relinquishment ofgain. TheCompetition Authority doesnotitselfhavetheauthority toimpose fines,
butintheeventofseriousinfringementcasestheAuthorityreportsthecasetotheprosecutingauthorities.
Imprisonment foruptosixyears maybeimposed under aggravating circumstances.
7. TheAgreement ontheEuropean Economic Area (theEEA Agreement)
Together withIceland andLiechtenstein, Norway isacontracting party totheEEAAgreement
along withtheEuropean Community anditsindividual member states. Theobjective oftheEEA
Agreement is"topromote acontinuous andbalanced strengthening oftrade andeconomic relations
between thecontracting parties withequal conditions ofcompetition, andtherespect ofthesamerules,
withaviewtocreating ahomogeneous European Economic Area". Twoimportant means forattaining
these objectives aretheimplementation ofprovisions corresponding totheECprovisions regarding
thefreemovement ofgoods, persons, services andcapital, andECcompetition legislation.
ThecompetitionrulesapplicabletoundertakingsintheEEAAgreement,correspondtoArticle85
(general prohibition against anti-competitive practices), Article 86(abuse ofdominant position) and
Article 902(public undertakings) oftheECTreaty andtotherelevant secondary legislation. Theregime
formerger control under theTreaty alsoapplies under theEEA Agreement. Under thisregime the
European Commission ortheEFTA Surveillance Authority (seebelow) hastheexclusive authority
totakedecisions onmerger cases above specific thresholds. These provisions havebeenincorporated
intoNorwegian legislation intheform ofspecial actsandregulations.
TheEFTAstateswhicharecontractingpartiestotheEEAAgreementhaveestablishedaseparate
institutional system fordecision-making andsupervision. TheEFTA Surveillance Authority, located
inBrussels, Belgium, andtheEFTA Court, situated inLuxembourg, wereestablished byanagreement
between theEFTA countries.3These twobodies areincharge ofsurveillance andjudicial control
withregard totheEFTA countries 'fulfilment oftheirobligations under theEEAAgreement, andwith
regardtothecompetitionrulesapplicabletoundertakings.TheEFTASurveillanceAuthorityisaparallel
bodytotheEuropean Commission inthefieldofcompetition, andtheEFTA Court isaparallel body
totheEuropean Court ofJustice.
TheEEA Agreement contains provisions ontheattribution ofcases between theEFTA
Surveillance Authority andtheCommission inthefields ofcompetition. Theguiding principle isthe
"onestopshop", which isintended toavoid theparallel handling ofcases. Thismeans thatadecision
byoneoftheauthorities should berespected bytheother authority. Thus, theagreement contains
specific provisions governing theclose cooperation between thetwobodies.
Under theEEA Agreement Norwegian undertakings havetocomply withboththenational
regime andtheEEA regime insofar asthepractice athandhasanappreciable effect ontrade.
8. Public Sector Measures
OneoftheCompetition Authority 'stasksistocallattention tothepossible restraining effects
oncompetition ofpublic measures. Thismeans thattheCompetition Authority plays animportant
roleindecision-making procedures, since itensures thatcompetition policy aspects aretaken into
consideration inconnection with public measures such asnewlegislation andthegranting of
2Corresponding toArticles 53,54and59respectively, oftheEEA Agreement.
3TheAgreement between theEFTA States onEstablishing aSurveillance Authority andaCourt ofJustice.WT/WGTCP/W/31
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authorizations orconcessions. TheAuthority maysubmit proposals aimed atstrengthening competition
orfacilitating access fornewcompetitors.
9. TheRelationship between theCompetition ActandSector-Specific Legislation
Inthemarkets forelectric power, financial services, postandtelecommunications, railway
andairtransport, health, andintheagricultural andfisheries sectors, special sector-specific legislation
mayoverride theCompetition Act.InothercasestheCompetition Actandtherespective sector-specific
legislation mayoverlap.
Inorder toavoid possible conflicts intheimplementation ofdifferent legislative regimes, the
Competition Authority hasarrived atworking agreements forcooperation andcoordination withthe
Norwegian Telecommunications Authority in1995 andwiththeBanking, Insurance andSecurities
Commission andtheNorwegian Water Resources andEnergy Administration in1996. Thespecial
legislation inthese sectors includes matters which alsocome under competition law. Forexample,
mergers between firms inthefinancial orelectric power sector require approval bythesector-specific
authorities intheformofconcessions, buttheCompetition Authority mayalsointervene insuchcases.