Enforcement proceedings in dominance in Norway

Enforcement proceedings

Which authorities are responsible for enforcement of the dominance rules and what powers of investigation do they have?

Enforcement is carried out by the Norwegian competition authorities, which are the King (ie, the Council of Ministers), the Ministry of Trade, Industry and Fisheries, the newly established Competition Complaints Board and the Norwegian Competition Authority (NCA). In practice the NCA is main enforcer in Norway. In addition, the ESA can enforce article 54 of the EEA. In 2016 the CA was amended by the introduction of the Competition Complaints Board, which started its functioning in April 2017. Somewhat simplified, the Complaints Board is the exclusive appeals body for all decisions by the NCA.

The powers of investigation conferred upon the NCA are set out in Chapter 6 of the CA. Pursuant to section 24, everybody is obliged to provide the NCA with the requested information in respect of a suspected breach of section 11 of the CA. Moreover, the NCA can, on the basis of section 25 of the CA, carry out on-the-spot surprise investigations with a view to securing evidence on business premises or other places where relevant information may be found. Prior consent from the District Court is required to this effect. The Authority can require police assistance when it carries out such surprise investigation. The investigatory powers correspond roughly with those of the European Commission under Council Regulation (EC) No. 1/2003.

Decisions by the NCA imposing a fine for abuse of dominant position may be appealed to the Competition Complaint Board, and subsequently before Gulating Appeals Court, which then may examine and consider all aspects of the case. A decision from the NCA may not be challenged in court without having complained before the Competition Complaints Board. Nevertheless, national courts have the power to enforce section 11 of the CA in the context of private litigation.

What sanctions and remedies may the authorities impose? May individuals be fined or sanctioned?

The basic remedy is to require the abusive practice to be brought to an end, see section 12 of the CA. In addition to behavioural remedies, this may involve structural remedies provided that there are no behavioural remedies equally effective or if such remedies would be more burdensome on the company. Structural remedies have not yet been imposed.

The NCA may also accept remedies proposed by the company under investigation and close the case upon a binding commitment to these remedies. The NCA may accept remedies before completing its analysis of whether an abuse has taken place.

According to section 29 of the CA, the NCA may in addition to requiring the abuse to be brought to an end, issue an administrative fine provided that the abusive practice was carried out with negligence or intent. The NCA imposed fines in the SAS and Tine cases; however, these decisions were annulled on appeal and no final fines have yet been imposed in other section 11 cases. In 2018, the NCA fined Telenor ASA 788 million kroner. The decision is currently pending before the Competition Complaints Board.

The principles for calculating fines for violations of the CA are in line with the principles for calculating fines under the EEA and EU competition rules. Accordingly, fines may amount to up to 10 per cent of the worldwide turnover of the undertaking. However, this is a maximum limit and the level of the fine will be determined on a case-by-case basis.

Infringement of section 11 of the CA does not trigger criminal sanctions. However, such sanctions are available in respect of anticompetitive agreements violating section 10 of the CA. Moreover, failure to comply with decisions by the NCA or the obligation to provide information to the NCA and the provision of incomplete or incorrect information can result in criminal sanctions being imposed.

The ESA has imposed fines in two major cases being the Posten Norge case (2010) and the Color Line case (2013).

Can the competition enforcers impose sanctions directly or must they petition a court or other authority?

The Competition Authority may pursuant to section 29 of the CA issue administrative fines directly. Criminal sanctions must be decided by a court (or by way of the undertaking in question accepting a fine proposed by the public prosecutor). As mentioned above, violations of section 11 of the CA are in themselves not subject to criminal sanctions.

What is the recent enforcement record in your jurisdiction?

Section 11 of the CA has been infrequently enforced. After its adoption in 2004, the ambition of the NCA was to enforce the provision in more than one case annually. However, this ambition has not been met.

After its adoption, the NCA has adopted three landmark section 11 decisions. The SAS decision in 2005 concerned predatory pricing in the air transport industry and was settled during appeals proceedings. The Tine decision in 2011 related to exclusionary practices in the dairy sector and was subsequently quashed by the courts. In 2018, the NCA fined Telenor ASA 788 million kroner for abuse of dominance in the market for retail mobile services. This is the highest fine ever imposed by the NCA, and the decision is currently pending before the Competition Complaints Board.

Where a clause in a contract involving a dominant company is inconsistent with the legislation, is the clause (or the entire contract) invalidated?

As under article 102 of the TFEU and article 54 of the EEA, contracts are void as far as they are in breach of section 11 of the CA. Thus, if it is possible to separate the illegal provisions from the remaining terms, the latter will be valid and enforceable. The assessment of partial versus total invalidity is a matter of general Norwegian contract law.

To what extent is private enforcement possible? Does the legislation provide a basis for a court or other authority to order a dominant firm to grant access, supply goods or services, conclude a contract or invalidate a provision or contract?

Private parties may enforce alleged breaches of the CA in national courts. Although not a requisite for private enforcement, if there is a prior decision or judgment confirming a breach of the CA, the statutory limitation is prolonged to one year after that final decision or judgement.

It is possible to initiate private enforcement actions before national courts in order to compel a dominant firm to grant access, supply goods or services, or conclude a contract.

The Norwegian Patent Act contains a provision that empowers the NCA to grant compulsory licences based on a substantive assessment that for all practical purposes corresponds to that applied pursuant to section 11 of the CA. This provision is rarely relied upon in practice.

Do companies harmed by abusive practices have a claim for damages? Who adjudicates claims and how are damages calculated or assessed?

Companies harmed by abusive practices can claim damages (economic loss). This is executed by way of general court proceedings if an out-of-court settlement cannot be reached. Class actions are possible according to Chapter 35 of the Civil Procedure Act.

To what court may authority decisions finding an abuse be appealed?

The authority decisions finding an abuse may be appealed, and the Competition Complaints Board may examine and consider all aspects of the case - both facts and law. As mentioned above, the new appellate body - the Competition Complaints Board now handles all complaints against decisions by the NCA, including in dominance cases. The district courts no longer review appeals against NCA decisions in abuse cases as they did before. However, decisions from the Complaints Board may subsequently be appealed to Gulating Court of Appeal in Bergen. Judgments from the Gulating Court of Appeal can be appealed to the Supreme Court of Norway, but any matter brought before the Supreme Court must initially be considered by the Appeals Selection Committee. An appeal cannot be brought before the Supreme Court without the leave of the Appeals Selection Committee. This leave to appeal may, for example, be granted in cases that raise matters of principle beyond the specific subject matter of the issue in dispute.