Enforcing EEA competition law and state aid rules in Iceland 30 May Gjermund Mathisen Director for Competition and State aid

 Lower prices  Better quality  Wider choice  More innovation

ESA as a competition authority ESA is many things; it is also a competition authority competent to deal with competition cases in Iceland ESA can, and does, enforce competition rules in a number of different ways, such as: – Assisting the Icelandic Competition Authority – Taking direct against against Icelandic undertakings – Taking action against public authorities – Intervening before Icelandic courts

Assisting the Icelandic Authority The Icelandic Competition Authority is obliged to apply Article 53/54 EEA in all cases where trade with other EEA States may be affected Low threshold, which may be met also where the market is national, or even just regional The Icelandic Authority is obliged to cooperate with ESA – and does a very fine job at that – in its enforcement of the EEA Agreement Important part of what ESA does in this field

Strengthening national authorities As the «first line» in enforcement of EU/EEA competition rules, national competition authorities may need strengthening in their independence, and in their toolbox The Commission has launched an initiative on «Empowering the national competition authorities to be more effective enforcers» s/2015_effective_enforcers/index_en.html s/2015_effective_enforcers/index_en.html

ESA action against Icelandic firms ESA can investigate and ultimately impose fines on Icelandic undertakings ESA has so far been more active in Norway and Liechtenstein, but this may change Some low-key investigations in Iceland, but e.g. no «dawn raids» and no fines, so far In some respects ESA has stronger powers than the Icelandic Competition Authority – E.g. the power to raid company executives’ homes

Competition and the Government ESA is also following up the EEA competition rules vis-à-vis the Icelandic Government (ministries). Current examples: Reasoned opinions for failure to incorporate Regulations in Icelandic law (mergers, air transport, technology transfer) Request for Information concerning derogation clauses in the Agricultural Act No 99/1993; e.g. flavoured yogurt is subject to EEA law. – Skyr?

ESA in Icelandic courts ESA can intervene before national courts in cases concerning Article 53 or 54 EEA The Commission has done this for years ESA started with two interventions before Norwegian courts, in 2014 and 2015 Now also before the Reykjavík District Court: Icelandic Competition Authority v Byko/Norvík /co-operation-with-national-courts/ /co-operation-with-national-courts/

 Fostering sustainable growth  Encouraging budgetary consolidation  Limiting distortions of competition  Keeping the single market open

State aid can take many forms Cash grants Tax breaks Cheap loans or guarantees Sale of public assets below market price Public purchase of assets above market price Public funding of designated infrastructure Cross-subsidisation of economic activity Etc., etc.

Íslandsbanki and Arion bank Investigation into alleged unlawful state aid granted to Íslandsbanki and Arion banki through loan conversion agreements with the Central Bank (conversion from short-term to long-term), on allegedly preferential terms Last financial crisis state aid case (208/15/COL)208/15/COL Drawing to a close; maybe before summer If aid is found, it may have to be paid back, with compound interest

Íslenska Gámafélagið Investigation into potential state aid granted through the rent of land and property in the Gufunes area in Grafarvogur (261/15/COL)261/15/COL Has the City of Reykjavík rented out land and property in the area, to Íslenska Gámafélagið, at a rate below market price? If so, the difference between the lower rate and market price constitutes state aid and may have to be repaid, with compound interest

Thorsil Notification for legal certainty ESA’s deadline 11 July; maybe by end of June Delivery of power to new Thorsil silicon smelter in Helguvík, Reykjanesbær State owned Landsvirkjun arguably acting as a Market Economy Operator Privately owned HS Orka power contract not an issue in any case

Duty free stores at KEF Does the exemption from taxes/charges, for the duty free stores at KEF, constitute incompatible state aid? Are the duty free stores at KEF in competition with ordinary stores in e.g. Reykjavík? Complaint from the Icelandic Federation of Trade and Services («SVÞ») Up for discussion with the Icelandic authorities at the package meeting

E-25/15 ESA v Iceland Action brought before the EFTA Court, by ESA against Iceland, for failure to fully comply with Decision 404/14/COL; judgment pending Decision 404/14/COL Iceland has failed to meet strict deadlines to cancel incompatible aid under the (then) Investment Incentive Scheme, and to «recover» the aid; that is, to make beneficiaries repay any aid disbursed Swift repayment /«recovery» must be ensured

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