Cartels 2019 Comparisons

Last Updated June 13, 2019

Law and Practice

Authors



Advokatfirmaet Thommessen AS has offices in Oslo, Bergen and London and is the Norwegian member of Lex Mundi. The firm provides advice to Norwegian and international companies as well as organisations in the public and private sectors, ranging from SMEs to large multinational corporations. Thommessen covers all business-related fields of law. 240 people work at the firm today; approximately 180 of them are lawyers, of whom 15 are specialised in EU/EEA and competition law. The firm has a market-leading practice for merger control, and is well known for its handling of major cases pertaining to abuse of dominance and cartel investigations. Thommessen's EU/EEA and competition law practice acts for major clients across a range of sectors including telecommunications, finance, life sciences and shipping. Thommessen has been involved in the majority of complex cartel cases in Norway over the last two decades. Its lawyers regularly assist clients in relation to unannounced inspections, the subsequent investigation phase, statements of objections and legal challenges of negative decisions before the courts and the Competition Complaints Board. Thommessen also has experience with national and international damages cases for both defendants and claimants.

The statutory bases for challenging cartel behaviour in Norway are Section 10 of the Norwegian Competition Act of 5 March 2004 ('the Competition Act' or 'the Act') and Article 53 of the Agreement on the European Economic Area ('EEA Agreement'). Both provisions mirror Article 101 of the Treaty on the Functioning of the European Union (TFEU), and prohibit all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition.

Procedural rules related to the investigation of cartel behaviour are provided in the Competition Act and Regulations adopted pursuant to the Act. In the case of civil or criminal procedures, further procedural rules are provided in the Dispute Act and the Criminal Procedure Act.

Chapters 2 and 3 of Protocol 4 to the Surveillance and Court Agreement set out the procedural rules implementing Article 53 of the EEA.

The Competition Act is predominantly enforced by the Norwegian Competition Authority (NCA). The NCA also has the power to enforce Article 53 EEA in Norway, subject to the provisions in the EEA Agreement regarding division of competence between the NCA and the EFTA Surveillance Authority (ESA).

Decisions of the NCA are subject to appeal review by the Norwegian Complaints Board for competition ('the Complaints Board') and the Gulating Court of Appeal, which have the power to review all aspects of the case. Judgments of the Gulating Court of Appeal may, after consideration by the Appeals Selection Committee, be tried before the Norwegian Supreme Court. In general, the Supreme Court will only review cases concerning principles of general importance. 

The ESA has the power to enforce Article 53 EEA when the cartel behaviour may affect trade between Norway and one or more EEA states. The ESA's decisions in cartel cases can be challenged before the EFTA Court in the same manner as decisions by the EC in cartel cases can be challenged before the EU's General Court.

Cartel behaviour is subject to both criminal and civil liability. Firstly, the NCA may impose an administrative fine of up to 10% of the company's turnover in its last fiscal year for wilful or negligent violations of the cartel prohibition. Secondly, cartel behaviour may result in criminal fines being imposed on individuals. Thirdly, cartel behaviour committed with intent or gross negligence can result in imprisonment of individuals for up to three years, or up to six years in the event of severely aggravating circumstances.

The leniency provisions do not apply to personal punishment, therefore employees participating in cartel behaviour still risk criminal prosecution even if the undertaking is granted leniency. The criminal liability provision has not been used since the current Competition Act entered into force in 2005. However, in recent years political focus has been placed upon this provision, calling for its use against individuals in serious cartel cases.

Private parties may challenge cartel behaviour by informing the NCA. Such information may be submitted anonymously or not, but the NCA is always obliged to keep the informant's identity confidential. There are no formal criteria that need to be fulfilled when submitting information, but it facilitates the NCA's initial assessment of the merits if details of the alleged infringement and available evidence are provided. The NCA has discretion in its decision whether or not to start an investigation.

Private parties also have the opportunity to challenge cartel behaviour through the ordinary civil courts, either as standalone or follow-on damages claims, or as a defence in private litigation relating to other claims. Private enforcement of competition law is not yet common in Norway.

The term 'cartel conduct' is not explicitly used in Norwegian law. Section 10 of the Competition Act and Article 53 of the EEA Agreement prohibit agreements between undertakings, decisions by associations of undertakings and concerted practices that have as their object or effect the prevention, restriction or distortion of competition. This scope of application is sufficiently broad to encompass both hard-core cartels and efficiency-producing joint actions between competitors.

The term 'cartels' in Norwegian competition law is generally used only for naked price-fixing, market-sharing, bid-rigging and other types of serious anti-competitive collusion between independent undertakings. As such, in the Norwegian context, the term 'cartel behaviour' is normally used only for co-operation between competitors that has a restrictive object (rather than only restrictive effects), although some forms of behaviour that are classified as restrictive by object are normally not included in the definition of 'cartels' (eg, resale price maintenance). It is important to note in this context that Norwegian law takes a strict approach to what constitutes restriction by object. In its judgment HR-2017-1229-A Ski Follo Taxi, the Norwegian Supreme Court upheld the NCA's finding of a restriction by object and the imposition of fines in the case of a fully disclosed (and seemingly efficiency-producing) bidding consortium between two small taxi companies since, based on the facts of the matter, they were viewed as potential competitors with regard to the contract in question.

Conduct involving joint actions between competitors that is restrictive of competition will be permissible if it satisfies the cumulative criteria for exemption laid down in the third paragraph of Section 10 of the Competition Act, or the identical criteria in Article 53 of the EEA Agreement. This provision mirrors TFEU Article 101 (3) and exempts agreements which contribute to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which do not impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives, nor afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.

It has generally been held that the exemption clause is only applicable in rare circumstances in relation to conduct that is restrictive by object (rather than by its effects). The Norwegian Supreme Court did not have to take a position on the applicability of the exemption clause in its judgment in the Ski Follo Taxi case referred to above, so it remains to be seen whether the apparently strict approach to what constitutes a restriction by object in Norwegian law will result in a more flexible approach to the question of when the exemption clause can be invoked.

As explained above, the scope of application of Section 10 of the Competition Act and Article 53 of the EEA Agreement is sufficiently broad to encompass both hard-core cartels and efficiency-producing joint actions between competitors. However, in Norwegian competition law the term 'cartels' is generally reserved for naked price-fixing, market-sharing, bid-rigging and other types of serious anti-competitive collusion between independent undertakings.

As noted above, in the Norwegian context, the term 'cartel behaviour' is normally used only for co-operation that has a restrictive object (rather than only restrictive effects), although some forms of behaviour that are classified as restrictive by object are normally not included in the definition of 'cartels' (eg, resale price maintenance).

Pursuant to the Competition Act, certain sectors may be declared exempt from the scope of the Act, either wholly or in part. Such exemptions have been adopted in relation to certain forms of co-operation in the book sales market and in order to align competition policy with policies relating to agriculture and fisheries.

Employment conditions are completely exempted from the scope of the Competition Act.

Pursuant to provisions in regulations given under the Norwegian Public Procurement Act, cartel behaviour (or clear grounds to suspect such behaviour) can result in disqualification from tender procedures. The procurement regulations also contain provisions on self-cleaning: credible compliance efforts will reduce or eliminate the risk of disqualification on the basis of past cartel behaviour.

The NCA's right to impose an administrative fine for cartel violations is subject to a limitation period of ten years, which runs from the time the infringement occurred. However, where there is a single and continuous infringement of the competition rules, the limitation period does not start until the cartel ceases to exist. The limitation period stops when the NCA has taken investigatory steps against an undertaking or has notified the undertaking of its potential liability.

In the case of civil follow-on actions, ie, when there is a prior decision or judgment confirming a breach of the CA, the statutory limitation is prolonged to one year after that final decision or judgment.

The Competition Act applies to terms of business, agreements and actions that are undertaken, have effect, or are liable to have effect within the Realm of Norway. Conduct that occurs outside Norway is covered by the Competition Act only as far as it has anti-competitive effects in Norway.

As explained in 1.1 Statutory Bases for Challenging Cartel Behaviour, above, Article 53 of the EEA Agreement applies in Norway in parallel with the Norwegian Competition Act where the conduct at issue may affect trade between Norway and one or more other EEA states. While the NCA is empowered to apply Article 53 EEA where applicable, it loses such competence if the ESA initiates proceedings.

Directive 2014/104/EU on damages actions has not yet been implemented in Norwegian law. Article 9 thereof, regarding the 'irrefutable' effect of competition decisions made by competition authorities or review courts in the EU, does not apply. The NCA and Norwegian courts will base their decisions on their own assessment of available evidence.

Depending on the situation, an investigation by the NCA may arise from a tip, an application for leniency or from the NCA's own analysis (eg, following a sector inquiry).

The initial step visible to the undertakings under investigation is normally either an information request (which may be informal or formal) or an unannounced inspection ('dawn raid').

Pursuant to Section 24 of the Competition Act, all types of information requested by the NCA in order to perform its duties under the Act must be provided. The NCA can request all forms of documentary evidence and statements from representatives of an undertaking under investigation, as well as from any other relevant person, subject to, eg, limitation following self-incrimination rights and legal privilege. The NCA may obtain such information either in writing or by arranging a meeting/interview with the relevant undertaking or person. Such interviews may also be organised during dawn raids.

Where there are reasonable grounds to assume that the Competition Act has been infringed, the NCA may obtain a court order to seek evidence at the premises of the undertakings concerned by way of an unannounced inspection. The NCA is sometimes accompanied by the police during such inspections, but the police officers are normally dismissed when the NCA has been granted access to the premises.

During an inspection, the undertaking has a duty to allow the NCA to seek evidence and to provide information to the NCA. The undertaking under inspection has the right to be assisted by external counsel, and the NCA will normally wait for counsel to arrive at the premises.

The NCA must obtain a court order in order to execute a dawn raid. The court will issue such an order if the NCA proves that there are reasonable grounds to assume that the Competition Act has been infringed. When the court order has been granted, there are few restrictions on the NCA's access to and power to seize information it considers relevant. However, the court order itself may set some limitations, eg, the court order may be directed only at certain legal entities within a group, in which case the authorities may not seek evidence in other group companies. Also, the court order must specify if the authorities are allowed to access private homes.

Pursuant to the Competition Act Section 25, the NCA may confiscate items that may have significance as evidence for further examination. The NCA will usually seize a significant amount of electronic documents. The seizure of physical documents usually has a less predominant role.

Under the Competition Act, legal privilege applies to external as well as internal counsel, but does not extend to communication with in-house counsel when the ESA conducts investigations on the basis of EEA law. Usually electronic material is seized without legal privileged documents being excluded, but the undertaking will be given the opportunity to identify such documents at a later stage, before the authorities access the seized material.

As a general rule, only copies shall be seized, but original documents may be seized if the original in itself is judged to have particular value as evidence. The NCA may also seal business premises, books or business documents for the duration of the investigation, and for as long as is deemed necessary.

An undertaking may be subject to administrative fines if it provides incorrect or incomplete information to the competition authorities, (see also the Competition Act Section 29). Fines may also be imposed for breaking a seal – for example, on a door during a dawn raid. Furthermore, general provisions in the Norwegian Penal Code relating to unlawful spoliation of potentially relevant information may be applicable.

Everyone is obliged to provide information required by the competition authorities in order to perform their responsibilities under the Competition Act, subject to limitations mentioned in 2.3 Restrictions on Dawn Raids, above. Such information may be required in written or oral form within a specified time limit, from individual undertakings or groups of undertakings, and may be recorded and retained as audio recordings.

Individuals who are being interviewed by the NCA have the right to be assisted by a witness, and can refuse to answer self-incriminating questions. The NCA will inform them of their rights prior to the interview. The interview is recorded and the NCA will subsequently prepare a written summary, which the interviewees (and/or their counsel) will be asked to review. In cartel cases, the review will take place in a physical meeting with the NCA. The interviewee and his or her counsel will have to hand in the printed copies of the summary used during the review at the end of the meeting. Access to the file (including summaries of this kind) will only be granted at a later stage.

Refusal to co-operate with the NCA's information requests can result in administrative or criminal fines.

Pursuant to the Competition Act, undertakings or persons that are under investigation for violation of the Act shall be granted access to the documents of the case as long as such access will not harm or danger the investigation or any third party. In practice, access is not normally granted until the statement of objections.

Both officers and employees have the right to be assisted by a witness during interviews. In practice, the counsel advising the company (or an in-house lawyer) will participate if interviews are held during the dawn raid. When subsequent interviews are held, the potential conflict of interest between the company and the interviewee could render it advisable for the officer or employee to retain its own counsel.

There are no specific guidelines for the role of legal advisers during interviews with the NCA, although the NCA will generally object if the lawyer takes an active role in responding rather than the officer or employee. The lawyer's role is therefore typically to ensure that the interview is conducted in an orderly manner, that the NCA does not ask leading questions, that the NCA takes note of any nuances in the interviewee's responses, etc.

Whether individuals should obtain separate counsel will depend on the situation. Where the role of the individual in the proceedings is clearly that of a witness rather than a suspect, the lawyer advising the company will normally be present. In contrast, if an officer or employee risks individual prosecution, he or she would normally be advised to seek individual legal representation in order to prevent a conflict of interest. However, there is no requirement for separate counsel to be retained if the company and the individual (or several individuals) do not have conflicting interests.

Defence counsel should immediately familiarise themselves with the matter and consider whether the client may be in a position to apply for leniency. Also, defence counsel should advise the undertaking on whether any change of practice is required.

Where the NCA has launched a dawn raid, counsel should analyse the decision authorising the dawn raid, together with the company, in order to understand the scope of the search. Counsel should agree with the NCA on the conduct of the investigation and the procedure for review of the seized data, including the identification and isolation of any legally privileged documents. As a matter of form, it would be advisable to apply for access to the file, although it is not likely to be granted at this stage.

The NCA may order companies to provide documentary evidence or oral explanations within the context of a dawn raid or in a direct dialogue with the company. There are no formal requirements, but requests for documents are normally submitted in writing. As for oral testimonies, the NCA conducts interviews with relevant officers and employees and others. These testimonies are normally recorded, with a summary in writing then prepared on the basis of the recording. An interview can occur on site during a dawn raid or can be scheduled as a separate meeting with the authority during the investigation.

Non-documentary information is obtained by the NCA through interviews, which are subsequently summarised in a written report.

Generally, a company or individual is obliged to submit documents or other evidence available to him/her, regardless of the location of the document. However, it is a prerequisite to this obligation that the company or individual actually has access to the evidence in question. If the request concerns evidence that is unavailable to the individual, a reply to the NCA to that effect would be sufficient to comply with the law.

The attorney-client privilege applies in Norway for communication between an attorney and his or her client. Norwegian law does not distinguish between internal (in-house) and external counsel in this regard, but there is a prerequisite that the attorney has an attorney licence (advokatbevilling) in Norway or a similar licence or admittance in another country. As a result of Norway's adherence to the European Economic Area (EEA) Agreement, the attorney-client privilege clearly applies to attorneys from other EEA states that provide legal services to Norwegian companies or individuals. In a decision relating to the corresponding rules in the former Norwegian Dispute Resolution Act (Rt-2000-2167), the Supreme Court held that the attorney-client privilege applied between a party to a contract dispute and in-house counsel admitted to the Bar not only in Europe, but also in several states in the US and before the US Supreme Court.

The decisive question in relation to the scope of application of the attorney-client privilege is whether the document or work in question relates to 'attorney work' (advokatvirksomhet) rather than the attorney's involvement in the client's business decisions or other processes. This criterion may have different implications for in-house counsel than for outside counsel, since the former may more often engage in work that does not constitute 'attorney work'.

Under the EEA Agreement, communication between in-house counsel and their client/employer is not privileged. ESA may therefore gain access to communication of this kind when investigating Norwegian companies for cartel behaviour.

When subject to an investigation, the right to contradiction ensures that companies (and individuals) have the opportunity to submit their view of the relevant evidence of the case. Furthermore, the privilege against self-incrimination ensures that companies (and individuals) do not have to contribute to their own conviction.

Pursuant to the Competition Act Section 24 there is a general obligation to respond to the NCA's information requests, and such requests are not commonly resisted by individuals or firms. The duty to submit relevant information to the NCA applies for all cases, throughout the entire procedure. The obligation to inform the NCA is subject only to the condition that such information is required by the NCA to perform its duties under the Competition Act. There is no general duty to submit information on one's own initiative in the absence of a request from the NCA.

Non-co-operation with the NCA may result in a periodic penalty, an administrative fine being imposed on the undertaking, and criminal fines or imprisonment being imposed on the individual. The obligation to submit information before the NCA may be subject to certain limitations, particularly regarding attorney-client privilege and the protection against self-incrimination. The limitations of the information obligation for companies and individuals before the NCA are based on the case law from the European Court of Human Rights and Norwegian courts.

Although the NCA may request to receive documents containing confidential information, or seize them during an inspection, information that qualifies as business secrets will not be made available to third parties. However, while the NCA normally seeks input from the company that originates the information as to what information it considers to be confidential, it is the NCA that ultimately decides whether or not the information in question qualifies as business secrets.

When and how defence counsel for the target of a cartel investigation raise legal and factual arguments to persuade the enforcement agency to forego taking action or modify their prospective action is a matter of facts and strategy in each case. In principle, targets of a cartel investigation may raise legal and factual arguments before the NCA at any time during an investigation. In terms of formal procedure, however, the possibility to submit such arguments is formally given after receiving a statement of objections from the NCA, where the NCA's view on a company's liability is presented in the form of a draft decision. After having submitted comments to this preliminary decision, the NCA renders its decision on the matter.

The Competition Act sets out a framework for undertakings to apply for either full or partial leniency. The NCA shall grant full immunity to an undertaking if said undertaking is the first to submit information and evidence about a cartel that was unknown to the NCA, fully co-operates in the proceeding, and satisfies certain other conditions set out in the Act.

Partial leniency is granted if the undertaking assists with evidence that considerably improves the NCA's ability to prove the existence of a cartel. The first undertaking that fulfils this condition is granted a reduction of 30-50%. The second undertaking that fulfils the condition is granted a reduction of 20-30%. Any other undertaking that fulfils the condition is granted a reduction of up to 20%.

There are no special formal requirements for a leniency application, but the undertakings must forward relevant evidence and co-operate fully with the NCA. This normally means that the procedure would be in writing, but oral depositions are used in some cases.

During a leniency procedure, the NCA assures that the identity of the co-operative party is held confidential throughout the investigation proceedings. The leniency programme is open for all undertakings in principle, but only the first undertaking to approach the NCA may be eligible for full leniency. Furthermore, pursuant to the provision on full leniency, an applicant cannot be given full leniency if the undertaking has sought to coerce other undertakings to participate in the cartel. Based on the facts of the case, this could potentially exclude a 'ringleader' from being granted full leniency.

The Competition Act does not provide for a marker system, but the NCA appears to record the time of the initial contact made by the company's counsel, provided that the formal application is submitted promptly thereafter.

The Competition Act also provides for cartel settlements, with the provision being modelled on the EU cartel settlement system. If the NCA finds that a case may be suitable for settlement and a settlement is agreed upon, the administrative fine is reduced by 10%.

The NCA may seek information directly from anyone, including the company's employees. This usually takes the form of interviews, during which the employees have the right to be assisted by a legal counsel. The employee will be made aware of their legal rights (eg, the protection against self-incrimination) before the interview starts. However, subject to this limitation, they are obliged to provide the information requested by the NCA, which can be required in writing or orally. As explained above, oral interviews are normally recorded, with a summary being drafted by the NCA afterwards.

Interviews are normally scheduled some time in advance. When an investigation against the company is ongoing, the NCA will normally send the initial request for an interview through the company's attorney. If the employee retains its own legal representation, subsequent contact will normally go through the employee's counsel.

It is possible to file an appeal against the NCA's request for information, but this does not prevent the information-gathering or interview from going ahead as planned by the NCA.

The NCA may request information directly from anyone, but when a company has retained legal counsel any communication from the NCA will, in practice, be directed through the company's attorney.

The NCA cannot impose an obligation on companies or individuals located in other jurisdictions to respond to a request for information. However, the co-operation agreements in the field of competition law to which Norway is a party (at EEA level in particular, and through the agreement between Denmark, Finland, Iceland, Norway and Sweden on co-operation in competition cases) can – to some extent – enable the NCA to obtain or exchange information that is relevant to its investigation of cartel cases.

Inter-agency co-operation is not unusual in Norway. Pursuant to provisions in the Competition Act and the Public Administration Act, there are limitations on the use and exchange of information gathered in other administrative procedures, but there are also widely formulated exemptions from these confidentiality duties. In practice, there are few limitations on the ability of public enforcement bodies to exchange information, especially in the case of suspected law infringements.

Norway is a party to the Agreement on the European Economic Area, and the NCA has an ongoing working relationship with the EFTA Surveillance Authority (ESA). As mentioned above, Norway has also entered into an agreement with Denmark, Iceland, Norway and Sweden on co-operation in competition matters, which provides for the exchange of information between the authorities of those jurisdictions. A new agreement between the Nordic countries was signed in 2017 and will most likely enter into force in Norway in early Autumn 2019. The renewed agreement implies that the authorities may gather information and carry out inspections on their own territory on behalf of each other and, in addition to Denmark, Iceland, Norway and Sweden, it also includes Finland as a party.

Co-ordination between the jurisdictions can affect a case in the way that, pursuant to the EEA Agreement, the NCA loses jurisdiction to a case if the ESA opens proceedings. In practice, the NCA will generally 'hand over' relevant (ie, cross-border) cases to the ESA at an earlier stage than the ESA's formal opening of proceedings. A case may also be affected through co-operation with other jurisdictions in that the NCA receives information that sheds light upon the potential infringement.

However, and importantly, the NCA (like the competition authorities of the other EFTA states that are party to the EEA Agreement) is not a full member of the European Competition Network, in which only the competition agencies of the EU Member States take part.

Undertakings can only receive administrative fines for cartel violations, while individuals can – in principle – be sanctioned with criminal fines or imprisonment. This has not occurred since before 2005, when the authorities did not have the power to impose administrative fines. It is generally held that, in the case of sufficiently serious cartel activity, the NCA may initiate criminal proceedings against officers or employees.

To initiate a criminal proceeding, the NCA would have to submit a reasoned complaint to the police, stating that a violation of the cartel prohibition has occurred and including relevant information gathered by the NCA. The police are not bound by the NCA's investigation and will pursue further investigations if necessary.

The police prosecutor's office decides whether or not to prosecute the case. A criminal case is brought before a District Court. The defendants would have the right to access information available to the prosecutor. There are no pre-trial procedures in the case of criminal proceedings, although procedural issues may sometimes need to be resolved.

Appeals against the NCA's decisions in cartel cases are heard by the Competition Complaints Board, a court-like administrative body that started functioning on 1 April 2017. Contrary to the ordinary Norwegian courts, cases before the Competition Complaints Board are predominantly written procedures, supplemented by an oral hearing. Decisions from the Complaints Board can subsequently be appealed to Gulating Court of Appeal.

Enforcement actions against multiple parties in a cartel are typically dealt with by the NCA as a single proceeding, and will result in a single decision. There are no specific rules that give parties the right to obtain separate trials before the NCA.

When several companies appeal a cartel decision from the NCA, this will also generally result in a single proceeding with multiple parties before the appeals body (previously a District Court, but now the Competition Complaints Board).

Separate trials will normally only be possible if the court finds it expedient to split the proceedings.

The Norwegian Supreme Court has held (disregarding statements in the preparatory works of the Competition Act) that the NCA must establish the infringement with sufficiently clear and precise evidence in order to render a decision imposing fines.

Pursuant to the general case handling rules of the Norwegian Public Administration Act, the Competition Authority has the obligation to ensure that the facts of the case are sufficiently clear before it renders its decision. In application of this principle, the NCA acts as the primary finder of fact in cartel proceedings. However, a company under investigation will normally invest significant resources in rebutting those facts by providing additional facts or focusing on other aspects of the evidence presented by the NCA. In an appeals case, the Competition Complaints Board or competent court will review facts presented by both sides before rendering its decision.

There is no general ban in Norwegian law on evidence obtained in one proceeding being used in another. However, each proceeding is to be decided based upon the facts of the case in that proceeding, so evidence that is obtained in one proceeding may be challenged in another.

As an unannounced inspection including seizure of documents requires a court order, it is not for the NCA to use such documents freely in other cases.

There are no formal rules of evidence in Norwegian law; instead, the principles of free evaluation and free presentation of evidence apply. These principles include discretionary freedom for the public authorities and courts in their weighing of evidence, and freedom for the parties to a procedure to present whatever evidence they may, in whatever form, subject to any limitation that might follow from legal statutes (such as the prohibition against the use of legally privileged documents as evidence).

Since cartel violations are, per se, violations in Norwegian law, the NCA does not need to demonstrate any actual effects on competition. Economic experts therefore do not normally play a significant role in the NCA's assessment of a cartel case, although they are sometimes retained by the parties to provide insight, eg, into the existence and size of the economic effect of a cartel or alleged cartel. Experts within other disciplines are seldom used in competition cases, but can occasionally be relevant, eg, for complex markets.

While cartel damages cases (both standalone or follow-on) are still rare in Norway, it can be expected that both sides to such a case will rely heavily on economic evidence to support their view on the existence (or non-existence) of the economic effects of a cartel.

The right to contradiction, attorney-client privilege, and the right against self-incrimination are the main privileges affecting the conduct of cartel investigations in Norway.

Multiple or simultaneous enforcement proceedings could occur in a case where the related facts include competition law issues and other law infringements. An example would be an investigation undertaken by the NCA into an alleged competition law infringement while other non-competition-related criminal offences are investigated by the police – eg, ØKOKRIM, which investigates serious economic fraud. In such cases, the prohibition against double jeopardy may prevent the ability of several agencies to sanction the same factual infringement.

The NCA has the competence to impose periodic penalties for non-compliance with information requests and administrative fines for wilful or negligent violations of the cartel prohibition. The imposition of such sanctions is regulated by chapter 7 of the Competition Act and the Regulation on fines for breaches of the Competition Act. In the criminal path, the courts can impose prison sentences and criminal fines on individuals for wilful or gross negligent violations of the cartel prohibition, in accordance with Section 32 of the Competition Act. The maximum prison sentence is three years, but sentences of up to six years can be imposed under aggravating circumstances. Imprisonment has never been used for violations of the current competition laws, but prior to 2005 criminal fines were sometimes imposed on officers and employees of companies that had participated in a cartel.

There is no specific procedure for plea bargaining in Norwegian competition cases, but the Competition Act allows cartel settlements in which fines for violations might be reduced by up to 10%. This system is inspired by EU competition law and broadly follows the same procedure. It is up to the NCA to initiate a cartel settlement process if it finds it appropriate. In practice, such processes will typically be initiated after the NCA has already investigated the matter for some time.

The Norwegian competition authorities and courts apply a free assessment of available evidence, so liability or responsibility in one case will not determine the outcome of other cases.

Although not binding on the court, a final decision in a cartel case will, in practice, normally function as important evidence in a subsequent action for damages against the cartelists. Few procedures of this kind have been initiated in Norway to date and, at the time of writing, there have been no judgments where compensation has been awarded on the basis of cartel activity.

Under Norwegian public procurement law, cartel activity or suspected cartel activity can result in the rejection of a cartel member from a public tender procedure for a period of up to three years after the illegal conduct took place. Rejection within the three-year period only applies when such a sanction is deemed proportionate. The contracting authority's right to reject a bidder can be eliminated by a so-called 'self-cleaning' procedure, which requires the cartelist to compensate any loss inflicted on third parties (or pledge to do so), to co-operate actively with the relevant competition authorities and to implement necessary measures to prevent new violations.

These implications of a cartel decision cannot be avoided or mitigated through plea bargaining or settlements, although a settlement decision may provide less detail and therefore leave more open to debate in a subsequent damages case.

Only individuals can be subject to criminal prosecution for breaches of the Competition Act.

Such sanctions can either be fines or imprisonment for up to three years, or six years for severe violations of the cartel prohibition. No prison sentence has been imposed for violations of Norwegian competition law to date. Under the competition legislation that applied until 2005, criminal fines were sometimes imposed on companies and occasionally on officers that participated actively in the violation.

The civil sanctions available to the NCA for violations of the cartel prohibition are periodic penalty payments and administrative fines. Periodic penalties can be imposed on both undertakings and individuals, while only companies can receive administrative fines for violations of the cartel prohibition.

Periodic penalty payments can be imposed where the company or individual does not co-operate with the NCA – for example, by refusing to supply information requested by the NCA during the investigation.

Administrative fines are the NCA's ultimate sanction against undertakings or associations of undertakings for illegal cartel activity. Although these are administrative fines under Norwegian law, they qualify as punishment under the European Convention on Human Rights.

The regulation regarding the calculation of fines for breaches of the Competition Act sets out the method for calculating the fine and sets a maximum threshold for the fine of 10% of the undertaking's relevant turnover in its last fiscal year.

Many factors may play a role in the NCA's assessment of whether sanctions or penalties should be imposed, including the existence of a compliance programme, the content of that programme, and its implementation. By way of example, the existence of a compliance programme may be taken into consideration in the NCA's assessment of whether the company has violated the Competition Act through negligence or inadvertently.

The available sanctions in Norwegian competition law are limited to periodic penalty payments, administrative fines for companies, and criminal fines and imprisonment for individuals. Governmental proceedings cannot result in mandatory consumer redress.

Sanctions imposed by the NCA can, as of 1 April 2017, be appealed through an administrative complaint filed with the Competition Complaints Board, which is the mandatory body for appeal of the NCA's decisions. After a case has been decided in the Complaints Board, it can be appealed to Gulating Court of Appeal, and then to the Supreme Court (subject to general limitations).

Criminal sanctions are reviewed through the ordinary court system. A case is initiated before a District Court, appealed to the Court of Appeals and, in the last instance, appealed to the Supreme Court.

Private firms can seek compensation in Norwegian courts based on alleged cartel behaviour, either as a standalone action or as a follow-on claim. To date, there have been few cases of this kind, and none has resulted in a judgment.

Under Norwegian damages law, three requirements must be fulfilled in order to be entitled to compensation. First, there must be a basis for liability. A breach of the competition rules can constitute such a basis for liability, but does not automatically constitute culpable behaviour under Norwegian damages law. Second, the claimant must substantiate an economic loss. Third, there must be a causal link between the loss and the basis for liability.

A claim for compensation is brought before the ordinary Norwegian courts and can be appealed up to the Supreme Court, subject to the limitations that apply generally on the right to appeal.

A claim for compensation for alleged cartel activity will, in principle, succeed if the court finds it more likely than not that there has been a cartel, an economic loss, and a causal link between the cartel and the economic loss. In contrast, the standard required for the NCA to impose an administrative fine for an infringement of the cartel prohibition is that the violation is substantiated by sufficiently clear and precise evidence, which is intended to be a higher standard.

Only compensatory damages can be sought, according to the Norwegian law on damages. The claimant must prove a causal link between the culpable behaviour and the damage incurred. Only the net financial loss of the claimant will be compensated.

A case can be styled as a class action in Norway. In theory, consumer associations or public interest groups can also raise a case, but only if it can be proven that no other person or group of persons would be a more natural holder of a claim. This has been done in a few environmental law cases, and it remains to be seen whether it will occur in future competition cases.

There is no precedent concerning indirect purchasers or passing-on defences in Norwegian law. In order to have a claim for compensation under Norwegian law, the claimant must establish that he or she has suffered an economic loss. It follows by implication that – at least in theory – if a defendant successfully invokes the passing-on defence, an economic loss will not be established and no damages will be awarded. It remains to be seen how Norwegian courts will deal with this when cases of this kind are brought before them.

Claims for compensation due to breaches of competition law must be addressed to the ordinary courts, and are handled in accordance with the ordinary rules for civil litigation in the Dispute Act. The Norwegian court process is predominantly an oral process, with evidence being presented directly before the court.

Evidence from governmental investigations or proceedings is admissible in private civil litigation in Norway involving alleged cartels. As a starting point, the parties may present any evidence they find relevant. However, business secrets and other information that falls under the NCA's rules on professional secrecy are inadmissible without consent from the responsible ministry. Consent can only be denied if presenting the evidence could hurt other vital interests or be unreasonable to the business whose secrets are kept. The court can also decide, through a court ruling, to declare information under professional secrecy admissible if it finds that the rationale for secrecy must be given less weight than the rationale for presenting the evidence. The professional secrecy of lawyers cannot be overruled by a court.

There are also exceptions for evidence without relevance to the case and for disproportionate amounts of evidence, which might be declared inadmissible by the court.

As mentioned above, there have not been many damages cases in Norway, and none has resulted in a judgment. However, there are examples of out-of-court settlements in cases of this kind.

The complete litigation period in Norway may last from a few months to several years, depending on the complexity of the case and the appeals made. Cartel damages claims will typically be complex, evidence-loaded and resource-consuming, and, coupled with the predominantly oral process used in Norwegian courts, the litigation time is likely to extend to three to four years in total if the case is appealed all the way to the Supreme Court. A request for a preliminary ruling from the EFTA Court may extend the likely timeframe even further.

The main rule in civil litigation in Norway is that the losing party shall compensate the other party for its necessary costs associated with the case. The parties present their claims at the end of the oral hearing, and in the judgment the court decides whether the winning party shall be awarded costs and, if so, the amount (which is very often lower than the claimed amount). The successful attorney's fees are ultimately agreed between him or her and the client. It follows from the Norwegian Bar Association's Code of Ethics (which is legally binding) that the amount payable to a lawyer cannot be calculated as a percentage or a proportion of the outcome or value of the case. However, the principle of 'no cure no pay' is allowed, as are differentiated fees depending on the outcome, discretionary success fees, etc.

The general rule is that unsuccessful claimants are obliged to compensate the winning party for its necessary defence costs and attorney fees. However, if the winning party is to blame for the initiation of the case (eg, by refusing a reasonable settlement offer) or if the court, for other reasons, finds it reasonable not to impose such an obligation upon the unsuccessful claimants, the court may choose not to require the defendant to compensate the winning party's defence costs and attorney fees.

In class actions, costs are determined for each party. If the group is ordered to pay the defendant's costs, the members of the group will be collectively responsible.

Cases involving private civil litigation are brought before the District Court of competent jurisdiction (typically at the place of business of the defendant). The judgment of the District Court can be appealed to the Court of Appeals and further to the Supreme Court (subject to procedural limitations on appeal).

There are no other items of information that are pertinent to an understanding of the process, scope and adjudication of claims involving alleged cartel conduct in Norway.

Pursuant to Section 9 of the Competition Act, the NCA is obliged to provide guidance to undertakings on the understanding of the Competition Act and its enforcement in individual cases. The NCA has collected all legal sources and guidelines connected to the enforcement of the Competition Act Section 10 on its website: https://konkurransetilsynet.no/ulovlig-samarbeid/

Advokatfirmaet Thommessen AS

Haakon VIIs Gate 10,
PO. Box 1484 Vika
Oslo
Norway
0116 Oslo

+47 23 11 11 11

+47 23 11 10 10

firmapost@thommessen.no www.thommessen.no
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Law and Practice in Norway

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Advokatfirmaet Thommessen AS has offices in Oslo, Bergen and London and is the Norwegian member of Lex Mundi. The firm provides advice to Norwegian and international companies as well as organisations in the public and private sectors, ranging from SMEs to large multinational corporations. Thommessen covers all business-related fields of law. 240 people work at the firm today; approximately 180 of them are lawyers, of whom 15 are specialised in EU/EEA and competition law. The firm has a market-leading practice for merger control, and is well known for its handling of major cases pertaining to abuse of dominance and cartel investigations. Thommessen's EU/EEA and competition law practice acts for major clients across a range of sectors including telecommunications, finance, life sciences and shipping. Thommessen has been involved in the majority of complex cartel cases in Norway over the last two decades. Its lawyers regularly assist clients in relation to unannounced inspections, the subsequent investigation phase, statements of objections and legal challenges of negative decisions before the courts and the Competition Complaints Board. Thommessen also has experience with national and international damages cases for both defendants and claimants.