Enforcement December 6 th 2010

1. Enforcement December 6th 2010

2. The Competition Authority • Launched on July 1st 2005 • Independent agency • Separate Board of Directors • Reports to the Minister of Commerce • Director appointed by the Board • Mr. Páll Gunnar Pálsson • Day-to-day activities • Two assistant directors

3. The Competition Authority • Responsibilities: • Enforcement of the Competition Act • Promoting effective competition • Preventing unreasonable barriers • Preventing harmful oligopoly • Preventing restriction of competition • Facilitating access of new competitors

4. Budget • State budget • EUR 1.8 mill. for the year 2010 • 10% cut from the 2009 budget • According to the finance bill for 2011 there will be a 10% increase for next year

5. Staff and Competence • 24 employees • 10 lawyers • 9 economists • 5 other education and support staff • ICA’s success relies on extensive knowledge and experience • Ability to attract and maintain good human resources • Continuous education

6. Markets Tasks Transport and Travel Transparency Financial Markets Cartel Surveillance Board Dir. General Dep. Director General Telecom., IT and Media, Construction Admin. Management and Ownership Links Mergers Professional Services etc. Environment International Cooperation Market Analysis Energy Education and Culture Health and Social Affairs Consumer Goods, and Supplies Organisational Chart • The organisation chart of the Competition Authority is geared to performance and project management. The organisation chart is based on the following objectives: • To ensure a clear overview of certain specified core markets and principal tasks; • To make the best possible use of available expertise at any time for the tasks at hand; • To ensure that the Competition Authority and its constituent units work together as a united whole.

7. Allocation of resources in 2009 Types of work

8. Allocation of resources in 2009 Markets

9. Decisions of the ICA2005-2010 • 286 decisions (published on website, others not included)

11. Record number of cases are being processed, but fewer decisions are published on the website

12. Appeal rate has increased

14. Advocacy2005-2010 • 14 opinions • 3 national reports • 6 nordic reports • Bulletins published on ICA’s website • Commentaries/comments on bills from the Parliament

15. Summary of the most important cases • Oil Cartel • Credit card companies – Collusion and abuse of dominant position • Eimskip shipping company - Dominance • Hagar – Dominance (Food market) • Lyf&Heilsa – Dominance (Pharmaceuticals) • Merger of Dac and Lyfjaver (Pharmaceuticals)

16. Enforcement of competition law in times of crisis • Vigorous enforcement of competition law is the proper reaction to financial crisis • Record number of cases • 9 dawn raids • 10 companies fined for EUR 4.9m. • 4 mergers annulled • Conditions imposed on 11 mergers

17. Fines imposed2008 – 2010

19. Banks’ takeovers of commercial undertakings • Discussion Paper in December 2009 • Companies that have a reasonable hope of succesful operation • Writing off debts is to the advantage of consumers and the economy • Banks shall make clear profitability demands • Banks shall sell restructured companies as soon as possible

20. Banks’ takeovers of commercial undertakingsInterventions in 2009 – 2010

21. Conditions • Undertaking should be sold within a specified time limit • Undertaking shall operate as an independent competitor on the market • Reasonable demands for profitability • No business relations between the undertaking and other companies which the banks owns • No business relations between undertaking and customers of the bank • Transparancy • Ongoing monitoring and regular reporting