Yes, the Icelandic merger controls are set out in the Competition Act no. 44/2005 and Rules no. 1390/2020 relating to the notification of mergers. Merger control is the subject matter of Articles 17 and 17(a) to 17(g) of the Act.

Surveillance pursuant to the Competition Act and day-to-day administration of matters within the scope of the Act is entrusted to the Competition Authority. The decisions of the Competition Authority may be appealed to the Competition Appeals Committee. The Committee’s decisions may be appealed to the district courts.

Yes. In the field of merger control, the EFTA Surveillance Authority and the European Commission retain exclusive competence, national authorities have no jurisdiction over mergers that have an EFTA or Community dimension.

Yes. The merger filing requirements are listed in Article 17 (a) of the Competition Act no. 44/2005 and further detailed in Rules no. 1390/2020 relating to the notification of mergers no.44/2005 and further detailed in Rules no. 1390/2020 relating to the notification of mergers.

Pursuant to Article 17 of the Competition Act, a merger is regarded as having taken place where a change of control on a lasting basis results from:

• the merger of two or more previously independent undertakings or parts of undertakings;
• an undertaking taking over another 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 undertakings; or
• the creation of a joint venture performing on a lasting basis all the functions of an autonomous economic entity.

Control shall be constituted by rights, contracts or any other means which, either separately or jointly and having regard to the considerations of fact or law involved, confer the possibility of exercising a decisive influence on an undertaking, in particular by:

• ownership or the right to use all or part of the assets of an undertaking; and
• rights or contracts which confer decisive influence on the composition, voting or decisions of the organs of an undertaking.

No. Acquisitions of minority interests or equity that do not trigger control are not subject to notification.

The Competition Act applies to agreements, terms and actions with effect, or intended effect, in Iceland. As a consequence, the provisions on mergers apply to mergers that have the effect, or intended effect, in Iceland and not to ‘foreign-to-foreign’ transactions, provided they do not exceed the turnover thresholds for turnover in Iceland. As such, there is generally no local effects test.

A merger must be notified to the Competition Authority when the joint total turnover of the parties is ISK 3 billion or more in Iceland, and the annual turnover of the parties in question amounts to more than ISK 300 million, respectively. The Competition Authority is however authorised to require a party to notifiy a merger, even if the aforementioned conditions are not met, if the joint total turnover of the parties exceeds ISK 1.5 billion a year and the Competition Authority believes that the merger may substantially reduce effective competition.

Filing is mandatory, provided the merger meets the relevant turnover thresholds. The Competition Authority may also request filing even if the thresholds are not met, if the combined turnover of the parties exceeds ISK 1.5 billion and it believes that there is a significant probability that a merger can substantially reduce effective competition.

The Competition Authority shall be notified of a merger before it takes effect, but after the conclusion of an agreement on the proposed merger, the public announcement of a takeover bid or the acquisition of a controlling interest in an undertaking. Mergers that fall under the provisions of this Act may not be implemented while the Competition Authority is examining them.

A merger falling within the scope of the provisions of the Competition Act does not take effect while it is being examined by the Competition Authority. Phase 1 review must be completed within 25 working days and Phase 2 review within 90 days, extendable by up to 20 working days if additional information is needed. Please refer to our response to "Please provide an overview of the merger review process. Are there time limits within which the regulatory agency must act? Can they be shortened by the parties or be extended by the regulatory agency?" for further discussion.

The initial filing shall contain information on the merger, the undertakings concerned, the relevant markets and other details necessary for assessing the competitive effects of the merger. Annex 1 in the Rules No. 1390/2020 on the Notification of Mergers further provides that a merger notification shall include:

• a brief description of the merger;
• basic information about the parties to the merger;
• detailed information about the merger, such as the objective & the nature of the merger and the purchase price or extent of assets purchased or merged depending on the nature of the merger;
• an overview of ownership and control of companies in question;
• an assessment of affected markets;
• effects on consumers and intermediaries;
• in case of a joint venture, an assessment of its cooperative effects; and
• an overview of ancillary restraints if they are entered into in direct connection to the merger and necessary for the merger to be carried out

A shorter merger notification may be submitted when one of the following conditions is satisfied:

• the markets where the effects of the merger are felt are not connected;
• two or more parties to the merger operate in the same product or geographical market (horizontal merger), and their combined market share is less than 20 percent;
• two or more parties to the merger operate in product markets that are upstream or downstream relative to a market where one party to the merger operates (vertical merger), and the market share of each party or their aggregated market share is less than 40 percent.
• at issue is a merger in the meaning of Item d of Article 2 of these Regulations, cf. Item d of the first paragraph of Article 17 of the Competition Act, which has limited effects in this country; or
• a party that, together with others, had control over a company acquires full control over it.

A shorter notification shall include the following information:

• a list of the companies over which the parties to the merger have direct or indirect control;
• a description of the product or services markets and geographical markets where the effects of the merger will be felt and a reasoned assessment of the market share of the companies concerned in these markets;
• a reasoned assessment of the competitive effects of the merger; and
• copies of all agreements and other instruments on which the merger is based together with copies of the Annual Accounts of the companies that are parties to the merger.

The Competition Authority may grant an exemption from providing certain information requested pursuant to the Merger List if the Authority is of the opinion that the information is not necessary for a review of the merger in question. Such a request must be received by the Authority before the requirement to notify takes effect.

Yes, filing fees are applicable. For normal notifications, a fee of ISK 500,000 is required, and for shorter notifications, a fee of ISK 200,000 is required. Additionally, it should be noted that when notification is necessary due to The Competition Authority's request based on Article 17(b), no filing fee is required.

There are two phases of an investigation. The Competition Authority has 25 working days to notify a party that has submitted a notification of a merger if it sees a reason for further investigation of the competitive impact of the merger. That is the first phase of the investigation. If there are reasons for further investigations a notification is sent to the party that notified the merger before the end of the 25-working day period. Following that notification, phase two of the investigation begins in which the Competition Authority has 90 working days to complete the investigation. If parties to the merger request an extended investigation time, the Competition Authority may extend the time limit by up to 20 working days.  

The timetable for clearance cannot be shortened by other means than by submitting the notification earlier than required and ensuring that the initial notification is complete. It can delay the process if the initial notification is not complete or insufficient as the Competition Authority will require the submission of a complete and satisfactory notification.

The parties can request permission to complete the merger prior to clearance. The Authority can grant this request if delaying the implementation of the merger could harm the undertakings concerned or their business partners and threaten competition.

The Competition Act prohibits concentrations or transactions that would significantly impede effective competition in the market, in particular as a result of the creation or strengthening of a dominant position. The commentary for the bill of the Competition Act details that the test for clearance is comparable to the clearance test used by the European Commission when assessing mergers.

If the Competition Authority is of the opinion that a merger will obstruct effective competition by giving one or more undertakings a dominant position or by strengthening such a position or will result in a significant distortion of competition in the market in other respects, the Authority may annul the merger.

The Competition Authority may also establish conditions for such a merger that must be met within a given time. When assessing the lawfulness of a merger the Competition Authority shall take into account the extent to which the competitive position of the merged undertaking is affected by international competition. Moreover, when assessing the lawfulness of a merger account shall be taken of whether the market is open or whether market access is obstructed.

The Competition Authority may approve a merger if it is satisfied that the merger will not distort competition. If the Competition Authority believes that a merger will prevent effective competition by bringing about or strengthening a dominant position it may annul that merger, or set conditions for a merger that must be met within a given time.

In the event that the Competition Authority has found that a merger does not distort competition or has approved a merger subject to conditions, the Competition Authority may revoke such a decision where:

• the decision is based on incorrect information for which one of the merging parties is responsible or where it has been obtained by deceit; or
• the undertakings concerned violate the conditions attached to the merger.

The Competition Authority has the power to impose conditions upon a merger, whether structural or behavioral. If parties anticipate a negative decision, informal negotiations are often conducted with the Competition Authority proposing acceptable remedies to the merger. Parties can also proactively propose conditions during phase 2 of an investigation by the Competition Authority pursuant to Art. 17 (d). If parties propose conditions for a merger on the 55th working day of the investigation or later, the investigation automatically extends by 15 working days. There are no specific provisions in the relevant legislation on the timing of such negotiations. They would normally take place in the second phase of the investigation. The only conditions imposed by the Competition Act on remedies are that they must reduce or eliminate the negative effects on competition that are holding up the merger.

Failure to notify of a merger subject to notification constitutes a violation and is subject to fines of up to 10 percent of the total turnover of the preceding business year of any undertaking or association of undertakings involved in a violation. Providing false, misleading or incomplete information can result in fines up to the same amount, or lead to imprisonment for individuals up to two years or fines.

Implementing a merger before clearance constitutes a violation and is subject to fines of up to 10 percent of the total turnover of the preceding business year of any undertaking or association of undertakings involved in a violation.

Yes. The Competition Authority may request filing if the combined turnover of the parties exceeds ISK 1.5 billion (see answers to "What are the relevant thresholds for notification?" and "Is the filing voluntary or mandatory?").

If the Competition Authority is of the opinion that there is a significant probability that a merger which has already taken place, while failing to meet the conditions set out in the Competition Act, may substantially reduce effective competition, the Authority may require the merging parties to submit a notification of the merger, provided that the combined annual turnover of the undertakings concerned exceeds ISK 1,5 billion. After the requirement has been made, the time limit pursuant to Article 17(d) shall begin on the first working day following the receipt by the Competition Authority of a notification meeting the conditions of Article 17(a) and rules established pursuant to the provision.

From 2012 to 2017, the Competition Authority was notified of 156 mergers, where the Authority considered it necessary to intervene in 37 of them, or 23.7%. In those cases, the merger was either annulled or conditions imposed on it by the Authority.

The Competition Authority has, in the last decades, imposed three notable fines on undertakings for failing to notify mergers. With its decision no. 68/2007, the Authority imposed an ISK 1,500,000 (EUR 13,000) fine on an undertaking for failing to notify a merger within the statutory limits of the Competition Act; the decision was upheld by the Competition Appeals Committee. In 2008, the Authority fined an undertaking ISK 750,000 (EUR 6,500) for failing to sufficiently notify the Authority of a merger with decision no. 32/2008, later upheld by the Competition Appeals Committee.

Later the same year, the Competition Authority, with its decision no. 37/2008, fined an undertaking for failing to inform the Authority about significant changes in terms of the merger after a previous notification. Furthermore, the undertaking failed to inform the Authority when the merger was canceled. Thus, the undertaking was fined ISK 500,000 (EUR 4,300). The Competition Authority does monitor for transactions that should be notified; e.g., by following carefully financial news coverage in the media. In practice, fines for failure to notify a merger have only been imposed on those responsible for the notification.

Not applicable.