40 fines imposed in the last twelve months – increased turnover thresholds from 1 January 2007.

Due to extremely low turnover thresholds the obligation to notify mergers, acquisitions and other concentrations to the Norwegian Competition Authority is very comprehensive compared to most other jurisdictions. In accordance with the Norwegian Competition Act a concentration must, at the present time, be reported to the Competition Authority if
• the undertakings concerned have a combined annual turnover in Norway of at least NOK 20 million (approximately EUR 2.5 million), and
• each of the undertakings concerned has an annual turnover in Norway of more than NOK 5 million (approximately EUR 0.63 million).

 

A concentration which requires notification to the European Commission or the EFTA Surveillance Authority does not require notification in Norway.

 

The Ministry of Administration and Reform has resolved to raise the turnover thresholds with effect from 1 January 2007. The new regulations entail that a transaction must be notified to the Competition Authority if
• The undertakings concerned have a combined annual turnover in Norway of at least NOK 50 million (approximately EUR 6.3 million), and
• Each of the undertakings concerned has an annual turnover in Norway of more than NOK 20 million (approximately EUR 2.5 million).

 

The notification must be submitted to the Competition Authority at the latest when the final agreement has been entered into or control has been acquired. Whether an agreement is “final” for the purpose of the Norwegian Competition Act must be assessed on a case by case basis. If the agreement is subject to approval by the board of directors or shareholders’ meeting of any of the parties, it will not be considered “final”. In contrast, the agreement will generally be considered final notwithstanding conditions pertaining to third party consents or governmental approvals.

The Norwegian Competition Authority actively enforces the notification obligation and breaches will almost automatically lead to administrative fines if discovered. During the past year the Competition Authority has imposed fines of between NOK 10,000 (approximately EUR 1,230) and NOK 100,000 (approximately EUR 12,300) on approximately 40 companies for infringements, including delays of less than two weeks. The tendency is that the Competition Authority is imposing increasingly higher infringement fees.

The obligation to notify in Norway is triggered by transactions that qualify as “concentrations” as defined in the EC Merger Regulation. Hence, the following transactions will (if the turnover thresholds are satisfied), as a main rule, trigger an obligation to notify:
• Merger between two independent undertakings
• Acquisition of an undertaking (majority of voting rights or assets)
• Transactions and agreements which provide decisive influence over strategic decisions in the target company (e.g. acquisition of minority stake combined with certain veto rights)
• Establishment of a full-function joint venture.

 

Both parties to a merger are responsible for sending a notification to the Competition Authority. In the case of takeovers and other forms of acquisition it is the party or parties which acquire control of another undertaking which must submit the notification.

The submission of a so-called standardised notification initiates an opposition procedure in which the Competition Authority must decide within 15 working days whether to initiate an in-depth investigation. There is no automatic stand-still obligation during this period. If the Authority considers that the concentration requires further scrutiny, it will order the notifying party to submit a so-called complete notification. This triggers an automatic stand-still obligation which lasts until the end of phase 1, i.e. 25 working days counted from submission of the complete notification. If the case enters phase 2, the total case handling time is 100 working days counted from submission of the complete notification. The
duration of phase 2 can be increased to 125 working days if the notifying party proposes remedies and requests an extension of the deadline.

Thommessen has comprehensive expertise concerning problems relating to competition law and extensive experience with merger cases. We have profound industry knowledge and recognise the needs of our clients. This expertise is based on our experience from large, complex assignments from clients in most industries and sectors. A number of our lawyers also have working experience from the Norwegian Competition Authority, the European Commission, EFTA’s Surveillance Authority and the EFTA Court. In combination this provides Thommessen with the best conditions for which to provide advice concerning how competition rules can best be used in order to realise commercial and strategic objectives.