Conference on oligopoly in small economies.
Valgerður Sverrisdóttir Minister of Industry and Commerce
Ladies and gentlemen.
It is my honour and pleasure to address this first conference that the newly established Competition Authority holds on oligopoly in small economies.
(I am also pleased to see how many are present here today and are taking interest in this important issue. )
In January 2004 I appointed a commission to formulate policy regarding Iceland´s business environment, including methods of response to increased concentration, in the Icelandic business community.
The commission conducted an extensive study of the various aspects of Iceland´s business environment. In particular, comparisons were made with other countries to determine if improvements were needed in Iceland.
The commission pointed out that seldom or never before has there been such rapid change in Icelandic economic life as in recent years. Competition has blossomed in numerous fields that previously had experienced constraints, although in other markets competition has decreased.
The commission came up with proposals relating to three areas: corporate governance, financial reporting and auditing, and competition issues.
As regard competition issues, the commission examined whether there was reason to propose a special law concerning the formulation of conglomerates. The commission considered it preferable to take a course similar to that taken in neighbouring countries and not introduce a special law against conglomerates.
However, the commission came up with proposals as to how to increase efficiency in the field of competition.
Subsequently, I introduced a bill of law of a new Competition Act in Althingi, that was passed in spring 2005.
The main changes from the previous act were the following:
1. (one) New authority was established: The Competition Authority. The Competition and Fair Trade Authority and Competition Council were dissolved. The new Competition Authority only deals with competition issues, not with unfair trade and market transparency as before.
2. (two) More funds were allocated to the new Competition Authority.
3. (three) The Competition Authority was given clearer permission to demand structural changes of companies that have violated the Competition Act.
4. (four) Clearer focus was set on management and ownership links between undertakings.
5. (five) EC Regulation on decentralisation was implemented.
I am convinced that these amendments have made the supervision in the field of competition more effective. The new Competition Authority was establised in July 2005 so I believe that we have to let more time pass before we evaluate the result of the changes made in 2005. However, a lot has happened in Iceland since spring 2005. Mergers have become more frequent, and the concentration in the market even more than before.
I therefore believe that the discussions here today are very important and can even serve as an inspiration to further improvements of the Competition Act here in Iceland.
(I would like to thank the Competition Authority for this conference. I am pleased that the new authority is taken initiative in enhancing discussion on competition issues here in Iceland.)