The legal framework
The basic competition provisions are contained in Articles 53, 54, 57 and 59 of the EEA Agreement, and are very similar to the EC competition rules. Additional rules contain the general framework for the implementation of the competition provisions, set out the investigative powers of the Authority and deal with particular types of conduct and specific sectors. The Authority has also adopted various guidelines explaining in more detail the policy of the Authority on certain issues.
Article 53 (prohibition on anticompetitive agreements and practices)
Article 53(1) prohibits agreements or concerted practices which restrict competition between enterprises. The prohibition applies to agreements or concerted practices, as well as to decisions by associations of undertakings. The agreement or concerted practice in question must have as its object or effect, the prevention, restriction or distortion of competition. It must also affect trade between the Contracting Parties to the EEA Agreement.
An agreement or concerted practice which is incompatible with Article 53 is prohibited. There is no need for any competition authority decision or court ruling for the prohibition to apply. Prohibited agreements or concerted practices are considered null and void and are consequently not enforceable between the parties. Fines may also be imposed.
Agreements or concerted practices that satisfy the conditions in Article 53(3) are not prohibited. In order for Article 53(3) to apply, the agreement/conduct at issue must satisfy the following cumulative conditions:
- it must contribute to improving the production or distribution of goods or to promoting technical or economic progress;
- while at the same time allowing consumers a fair share of the resulting benefit;
- it must not impose any restrictions that are not indispensable to the attainment of those objectives; and
- it must not afford the undertakings concerned the possibility of eliminating competition in respect of a substantial part of the products in question.
Article 54 (prohibition on the abuse of a dominant market position)
Article 54 prohibits any abuse by an undertaking – or a group of undertakings – which has market dominance within the EEA, provided that the abuse may affect trade between the Contracting Parties to the EEA Agreement. Abuse can include:
- imposing unfair prices or trading conditions;
- placing trading parties at a competitive disadvantage by applying dissimilar conditions to equivalent transactions;
- conduct that excludes competitors from the market to the detriment of consumers.
Fines may be imposed for infringement of Article 54.
Article 57 (merger control)
Article 57 provides for the control of mergers and acquisitions. Provided certain turnover thresholds are met, a proposed merger or concentration must be notified either to the Commission or to the Authority. Failure to notify can result in fines being imposed.
Article 59 (public undertakings and undertakings with special or exclusive rights)
Under Article 59, the Authority may also take action against an EFTA State in respect of measures relating to public undertakings that are contrary to rules in the EEA Agreement, such as the competition rules. The same applies to an undertaking that has been granted special or exclusive rights by an EFTA State. The rules of the EEA Agreement also apply to undertakings that have been entrusted with the operation of services of general economic interest. A derogation from Article 59 may however apply to such undertakings if the rules of the EEA Agreement would obstruct the performance of the tasks assigned to them and provided that certain other conditions are fulfilled.
The Protocols to the EEA Agreement, in particular Protocols 21 to 24, contain additional rules for the application of the EEA Agreement in the field of competition:
- Protocol 21 on the implementation of the competition rules applicable to undertakings
- Protocol 22 concerning the definition of “undertaking” and “turnover”
- Protocol 23 concerning co-operation between the Commission and the Authority under Articles 53 and 54
- Protocol 24 on co-operation between the Commission and the Authority in the field of merger control
Secondary EC legislation in the competition field is, pursuant to Article 7 EEA, legally binding once integrated into the EEA Agreement. The acts relevant to competition are listed in Protocol Z1 and Annex XIV to the EEA Agreement, which incorporates the Community acquis in the competition field, subject to a number of EEA specific adaptations.
Chapter II and Chapter III of Protocol 4 set out the procedural rules implementing Articles 53 and 54 of the EEA Agreement and give the Authority the same powers as those the European Commission enjoys under Council Regulation 1/2003 and Commission Regulation 773/2004.
Chapter IV and Chapter V of Protocol 4 sets out the procedural rules relating to the control of concentrations between undertakings, effectively implementing the provisions of the EC Merger Regulation and Commission Regulation 802/2004.