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- Merger Control Regime
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1.1 Membership of Supranational Organization
1.1.1 Is the jurisdiction a member of/party to a supranational jurisdiction?
Yes. Iceland is a member of the European Economic Area (EEA) and the European Free Trade Association (EFTA).
1.1.2 Is the jurisdiction itself a supranational jurisdiction?
1.1.3 If the answer to Section 1.1.1 and/or 1.1.2 above is in the affirmative, what are the implications hereof?
As a contracting member state to the EEA Agreement, Iceland is subject to merger control by the European Commission. This means that transactions triggering the thresholds under the EU Merger Regulation (Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings) must be notified to the European Commission, save for markets and products falling outside the scope of the EEA Agreement.* Consequently, Iceland is precluded from applying its own domestic merger control rules to such transactions.
EFTA Surveillance Authority (ESA)
The EEA Agreement also contains provisions on the division of jurisdiction between the European Commission and the EFTA Surveillance Authority (ESA). EFTA states as defined under the EEA Agreement are Iceland, Liechtenstein and Norway. Whereas Switzerland is an EFTA member state, it is not a contracting party to the EEA Agreement.
If the EFTA thresholds under the EEA Agreement are triggered, the transaction is said to have an “EFTA dimension” and must be notified to the ESA. In this case, Iceland is also precluded from applying its own domestic merger control rules to the case, save for markets and products falling outside the scope of the EEA Agreement.*
If both the EFTA thresholds under the EEA Agreement and the thresholds under the EU Merger Regulation are triggered, the EU Merger Regulation takes precedence and the transaction must be notified with the European Commission.
The rules on attribution of jurisdiction are such that the European Commission in practice handles all cases. To date, no concentration with an "EFTA dimension" has been notified to the ESA.
The rules of the Merger Regulation on referral of cases between the Commission, ESA and national competition authorities are applicable to Iceland through Protocol 24 of the EEA Agreement.
*Products falling within the scope of the EEA Agreement are set out in Article 8. Such products are those falling within Chapters 25 to 97 of the Harmonized Commodity Description and Coding System, excluding the products listed in Protocol 2 of the EEA Agreement, and include the products listed in Protocol 3 (certain agricultural and fish products).
2. Nature of merger control regime
2.1 Mandatory or voluntary
2.1.1 Is filing mandatory or voluntary?
2.2 Suspensory effect
2.2.1 Must completion of the transaction await clearance by the relevant authorities?
A notifiable transaction must be notified to the Iceland Competition Authority prior to the implementation/completion of the transaction and following the conclusion of the agreement, the announcement of a public bid, or the acquisition of controlling interest.
1. What type of transactions are caught by the merger control regime?
1.1.1 Type of transactions that are caught by the merger control rules?
The transactions caught by the merger control rules are similar to those caught under the EU Merger Regulation (Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings).
A transaction is caught by the merger control rules if it brings a change of control on a lasting basis resulting from:
- the merger of two or more previously independent undertakings or parts of undertakings;
- the takeover by one undertaking of another independent undertaking;
- the acquisition, by one or more persons already controlling at least one undertaking, or by one or more undertakings, whether by purchase of securities or assets, by contract or by any other means, of direct or indirect control of the whole or parts of one or more other undertakings; or
- the creation of a joint venture performing on a lasting basis all the functions of an autonomous economic entity.
1.3 Definition of "control"
1.3.1 How are the concepts of "control" and "change of control" defined?
The definition of control is similar to that under the EU Merger Regulation (Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings).
"Control" is defined as arising when decisive influence is capable of being exercised in respect of the undertaking by rights, contracts or any other means, either separately or in combination and having regard to the considerations of fact or law involved.
2. Establishing jurisdiction for notification of mergers
2.3 General thresholds
Merger filing is needed if:
- The combined turnover of the undertakings concerned was at least ISK 3,000,000,000 in Iceland in the last financial year and the turnover of each of at least two of the undertakings concerned was at least ISK 300,000,000 in Iceland in the last financial year.
2.3.4 Are there any circumstances where transactions falling below these thresholds may be still investigated?
If the Competition Authority believes a concentration will substantially impede effective competition despite not triggering the jurisdictional thresholds, it can order that the transaction be notified for review if the combined turnover of the undertakings concerned exceeds ISK 1,500,000,000.
2.5 Foreign-to-foreign mergers
2.5.1 Do any exemptions, special thresholds etc. apply to foreign-to-foreign mergers, i.e. where none of the undertakings concerned is domiciled in the jurisdiction?
Foreign-to-foreign transactions are caught if they have an effect on the structural conditions of competition within Iceland.
3. Calculation and allocation of turnover, asset value, transaction value etc.
3.2 Relevant period for calculation of turnover
3.2.1 Which financial year(s) is relevant for the calculation of turnover?
The turnover is determined based on the preceding financial year or the 12 months preceding the transaction, as applicable.
3.3 Relevant undertakings for the calculation of turnover
3.3.1 The undertakings whose turnover is taken into account?
Turnover is calculated on a group level, including the turnover of a parent, subsidiary and other undertakings within the same group over which they have direct or indirect control.
3.7 Special rules
3.7.1 Do any special rules or principles apply to the calculation, allocation etc. of turnover, assets etc. for specific undertakings (e.g. State-owned undertakings, investment funds, credit and financial institutions, insurance companies, financial holding companies, others)?
All transactions involving a media service provider with an annual turnover of at least ISK 100,000,000 in Iceland must be notified to the Competition Authority.
If the Media Commission believes a concentration will substantially impede pluralism or diversity in the media industry despite not triggering said threshold, it may request that the Competition Authority order that the transaction be notified.
Foreign investment in the following industries must be notified to the Minister of Tourism, Industry and Innovation:
- the fisheries industry;
- the energy sector, and
- the aviation industry.
The obligation to notify does not apply to the latter two industries if the investor is an individual or a legal entity resident or established in the European Economic Area, in a member state of the European Free Trade Association or on the Faroe Islands.
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