Contributed By Advokatfirmaet Thommessen AS
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 (the “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 that 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. Chapters 2 and 3 of Protocol 4 to the Surveillance and Court Agreement set out the procedural rules implementing Article 53 of the EEA Agreement.
In the case of civil or criminal procedures, further procedural rules are provided in the Act relating to mediation and procedure in civil disputes of 17 June 2005 (the “Dispute Act‟) and the Act relating to legal procedure in criminal cases of 22 May 1981 (the “Criminal Procedure Act‟).
The Competition Act is predominantly enforced by the Norwegian Competition Authority (Nw. Konkurransetilsynet) (NCA), while Article 53 EEA is predominantly enforced by the EFTA Surveillance Authority (ESA).
The NCA also has the power to enforce Article 53 of the EEA Agreement in Norway if the cartel may affect trade between Norway and one or more EEA states, subject to the provisions in the EEA Agreement regarding the division of competence between the NCA and ESA. The NCA will then apply Article 53 in parallel with Section 10 of the Competition Act. Decisions of the NCA are subject to an appeal review by the Norwegian Competition Appeals Tribunal (Nw. Konkurranseklagenemnda) and the Gulating Court of Appeal, which has 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 of the EEA Agreement 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 European Commission in cartel cases can be challenged before the EU's General Court.
In addition, the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Nw. Økokrim) have the competence to investigate and prosecute cartel behaviour with a view to imposing criminal sanctions.
Cartel behaviour is subject to both criminal and civil liability. Firstly, the NCA may impose an administrative fine of up to 10% of the undertaking′s turnover in its last fiscal year for wilful or negligent violations of the cartel prohibition. Secondly, cartel behaviour may result in criminal fines 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 individual sanctions, which entails that employees participating in cartel behaviour may still face 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 2004. However, in recent years, the political focus has been placed on this provision, calling for its use against individuals in serious cartel cases. The NCA has stated that it recently reported such behaviour to the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime. The status of the case is not publicly known.
Private parties may challenge cartel behaviour by informing the NCA. Such information may be submitted anonymously, and the NCA is 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 deciding whether or not to start an investigation.
Furthermore, 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. In 2021, however, a large class action by an association representing Norwegian alarm customers was brought against the residential alarm companies Verisure and Sector Alarm subsequent to a fine imposed upon Verisure and Sector Alarm pursuant to breaches of applicable competition law. In their decision, the NCA stated that the companies limited the extent to which their door-to-door sales representative could sell alarm services to the other undertaking’s customers. There were also a substantial number of direct contacts between the two companies during the period in question, in which detailed information about market strategies allegedly was exchanged. The case has not yet been heard in court.
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 hardcore 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 primarily used only for co-operation between competitors that have a restrictive object (rather than merely 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 a 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. The strict approach is reflected in the NCA′s recent practice, particularly regarding information exchange between competitors.
Conduct involving joint actions between competitors that are 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 that 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 that does not impose on the undertakings concerned restrictions that 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.
Generally, the exemption clause has 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. Hence, 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 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 hardcore cartels and efficiency-producing joint actions between competitors.
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 align competition policy with policies relating to agriculture and fisheries.
Employment conditions are completely exempted from the scope of the Competition Act.
Furthermore, pursuant to provisions in regulations given under the Norwegian Public Procurement Act, cartel behaviour (or clear grounds to suspect such behaviour) may 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 when 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 ends when the NCA takes 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 Competition Act – 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 an effect, or are liable to have an effect within the Kingdom 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/Effects, Article 53 of the EEA Agreement applies 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 of the EEA Agreement where applicable, it loses such competence if the ESA initiates proceedings.
The Norwegian Supreme Court issued a ruling (HR-2019-2206-A) in November 2019 regarding the jurisdiction of Norwegian courts in a matter of private follow-on damages after a cartel settlement case. The question before the court was whether all involved companies could be brought before Norwegian courts as only one of the companies was domiciled in Norway. The Supreme Court ruled that the cases were sufficiently linked and all defendants could be sued before Norwegian courts.
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.
As of May 2022, there have been no changes in policy or practices due the COVID-19 pandemic.
An investigation by the NCA may arise from a tip, an application for leniency, or the NCA′s own analysis (eg, by following a sector inquiry), depending on the situation.
The first step of the investigation towards the undertaking under investigation is normally an information request (which may be informal or formal) or an unannounced inspection (dawn raid).
After initiating the case, the NCA will further examine the collected evidence. Pursuant to Section 24 of the Competition Act, anyone must provide all types of information requested by the NCA to perform its duties under the Act. The NCA may request all forms of documentary evidence and statements from representatives of an undertaking under investigation and 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 be organised during dawn raids. The contact between the undertaking and the NCA is normally extensive during the investigating phase.
Where there are reasonable grounds to suspect 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 may, if necessary, be accompanied by the police during such inspections. The police officers are normally dismissed when the NCA has been granted access to the premises.
During an inspection, the undertaking must allow the NCA to seek evidence and 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.
When the court order has been granted, there are few restrictions on the NCA's access and power to seize information it considers relevant. However, the court order may in itself set certain limitations. The court order may only be directed only at certain legal entities within a group, in which case the authorities may not seek evidence in other group companies. In addition, the court order must specify if the authorities are allowed to access private homes.
Pursuant to Section 25 of the Competition Act, 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, the legal privilege applies to external and internal counsel but does not extend to communication with in-house counsel when the ESA conducts investigations on the basis of EEA law (cf. C-550/07 Akzo Nobel). Usually, electronic material is seized without legal privileged documents being excluded, but the undertaking will be allowed to identify such documents at a later stage before the authorities access the seized material.
As a general rule, copies shall be seized. However, original documents may also be seized if the original document is considered 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 deemed necessary.
Everyone is obliged to provide the information required by the competition authorities to perform their responsibilities under the Competition Act, subject to limitations mentioned in 2.3 Spoilation of Information.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 being interviewed by the NCA have the right to be assisted by a witness and may 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 their 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 may result in administrative or criminal fines.
Pursuant to the Competition Act, undertakings or persons 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 endanger the investigation or any third party. In practice, access is normally not granted until the statement of objections.
An undertaking may be subject to administrative fines if it provides incorrect or incomplete information to the competition authorities. Fines may also be imposed for breaking a seal, eg, 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.
Both officers and employees have the right to be assisted by a witness during interviews. In practice, the counsel advising the undertaking (or an in-house lawyer) normally participates if interviews are held during the dawn raid. When subsequent interviews are held, the potential conflict of interest between the undertaking and the interviewee could render it advisable for the officer or employee to retain its/their 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 counsel'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. The counsel should, in any case, immediately familiarise themselves with the matter and consider whether the client may be in a position to apply for leniency. Also, 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 undertaking, to understand the scope of the search. Counsel should agree with the NCA on the conduct of the investigation and 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.
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 that of a suspect, the counsel advising the undertaking will normally be present.
On the contrary, if an officer or employee risks individual prosecution, he or she would usually be advised to seek individual legal representation to prevent a conflict of interest. However, separate counsel is not required to be retained if the undertaking and the individual (or several individuals) do not have conflicting interests.
The NCA may order undertakings 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, although requests for documents are normally submitted in writing. As for oral testimonies, the NCA usually conducts interviews with relevant officers and employees, and others.
These testimonies are normally recorded with a summary in writing and then prepared on the basis of the recording. An interview may occur on site during a dawn raid or may be scheduled as a separate meeting with the authority during the investigation.
Generally, anyone, including a undertaking or individual, is obliged to submit documents or other evidence available to it/them, regardless of the location of the document. However, as a prerequisite to the obligation, the undertaking or the individual must have access to the evidence in question. If the request concerns evidence 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 their client. Norwegian law does not distinguish between internal (in-house) and external counsel, but there is a prerequisite that the attorney has an attorney licence (Nw. advokatbevilling) in Norway or a similar licence or admittance in another country. As a result of Norway′s adherence to the EEA Agreement, the attorney-client privilege 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 USA 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‟ (Nw. 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 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. The ESA may, therefore, gain access to communication of this kind when investigating Norwegian companies for cartel behaviour.
When subject to an investigation, the right of contradiction ensures that companies (and individuals) may submit their view of the relevant evidence in the case. Furthermore, the privilege against self-incrimination ensures that companies (and individuals) are protected from providing information contributing to their conviction.
Pursuant to Section 24 of the Competition Act, there is a general obligation to respond to the NCA′s information requests. Such requests are not commonly resisted by individuals or firms. The obligation to submit relevant information to the NCA applies to any process under the Competition Act and 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. In the absence of a request from the NCA, there is no obligation to submit information on one′s own initiative. Non-co-operation with the NCA may result in a periodic penalty, an administrative fine imposed on the undertaking and criminal fines or imprisonment imposed on the individual. The obligation to submit information to the NCA may be subject to certain limitations, particularly regarding attorney-client privilege and the protection against self-incrimination. The limitations are based on 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. The NCA is obliged to protect confidential information. However, while the NCA normally seeks input from the undertaking that originates the information as to what information it considers confidential, the NCA that ultimately decides whether the information in question qualifies as business secrets/confidential information.
Arguments against the enforcement are initially raised against the NCA. Furthermore, any material procedural decision that the NCA make during their investigation can be appealed to the Competition Appeals Tribunal and the courts.
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 the said undertaking is the first of the participants in the cartel to submit information and evidence about a cartel to the NCA. In addition, the information must be unknown to the NCA; the undertaking must fully co-operate in the further process and satisfy certain conditions set out in the Competition 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%, while the second a reduction of 20–30%. Any other undertaking that fulfils the condition is granted a reduction of up to 20%.
A leniency application may be submitted orally or in writing. The undertakings must provide specified information such as the undertakings involved in the cartel and a description of the infringement, as well as forward any relevant evidence and co-operate fully with the NCA. The leniency procedure is normally in writing; however, oral depositions are used in some cases.
During a leniency procedure, the NCA will assure that the identity of the co-operative party is held confidential throughout the investigation. In principle. the leniency programme is open for all undertakings. However, the first undertaking to approach the NCA is the only undertaking which 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. However, the NCA appears to record the time of the initial contact made by the undertaking′s counsel, provided that the formal application is submitted promptly thereafter. The parties′ right to leniency may be granted while the undertaking gathers evidence or if a leniency application is submitted in a language other than Norwegian, Swedish, Danish or English. The NCA will set a deadline for the undertaking in such cases.
The Competition Act also provides for cartel settlements. The provision is modelled after the EU cartel settlement system. If the NCA finds a case may be suitable for settlement and a settlement is agreed, the administrative fine may be reduced by 10%.
See 2.11 Leniency and/or Immunity Regime. There are no other provisions providing explicit amnesty for competition law infringements.
The NCA may seek information directly from anyone, including the employees of the undertaking under investigation. The latter usually takes the form of interviews, during which the employees have the right to be assisted by legal counsel. The employee will be made aware of their legal rights (eg, the protection against self-incrimination) before the interview. However, subject to this limitation, the employee is obliged to provide the information requested by the NCA, which can be required either orally or in writing. As explained above, oral interviews are normally recorded, with a summary drafted by the NCA afterwards.
Interviews are normally scheduled some time in advance. When an investigation against the undertaking is ongoing, the NCA will usually send the initial request for an interview through the undertaking's legal counsel. If the employee retains his or her own legal representation, subsequent contact will typically go through the employee′s counsel.
It is possible to file an appeal against the NCA′s request for information, however, this does not prevent the information-gathering or interview from proceeding as planned by the NCA.
The NCA may request information directly from anyone, but when an undertaking has retained legal counsel, the communication from the NCA will, in practice, be directed through the undertaking's legal counsel.
The NCA cannot impose an obligation on undertakings 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 with Denmark, Finland, Iceland and Sweden on co-operation in competition cases) will – to a certain 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. Both the Competition Act and the Public Administration Act enable to some extent, the exchange of information between investigating authorities within the limits of their duty of confidentiality.
Norway is a party to the EEA Agreement, and the NCA also takes part in various co-operatives with entities from other jurisdictions. The NCA has an ongoing working relationship with ESA. In addition, as mentioned above, Norway entered into an agreement with Denmark, Finland, Iceland 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 entered into force in Norway in June 2019. The renewed agreement implies that the authorities may gather information and carry out inspections on their own territory on behalf of each other.
Co-ordination between the jurisdictions may affect a case in that, pursuant to the EEA Agreement, the NCA loses jurisdiction if the ESA opens proceedings. In practice, the NCA will generally “hand over‟ relevant (ie, cross-border) cases to the ESA earlier than 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.
Similar to the competition authorities of the other EFTA States that are party to the EEA Agreement, the NCA is not a full member of the European Competition Network, in which only the competition agencies of the EU member states take part.
Undertakings may only receive administrative fines for cartel violations, while individuals may, in principle, be sanctioned with criminal fines or imprisonment. This has not occurred since before 2004. 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 Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime, which is the police specialist agency for economic crimes, 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 inquiries if necessary.
The prosecutor′s office decides whether or not to prosecute the case. If prosecuted, the criminal case is brought before a District Court. The defendants 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 be resolved in advance.
While individual sanctions for breaches of the Competition Act is still uncommon in Norway, the NCA has stated that it has reported an individual to the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime. Whether the case is being investigated is not publicly known.
Appeals against the NCA′s decisions in cartel cases are heard by the Competition Appeals Tribunal, a court-like administrative body that started functioning on 1 April 2017. Contrary to the ordinary Norwegian courts, cases before the Competition Appeals Tribunal are predominantly written procedures, supplemented by an oral hearing. Decisions from the Competition Appeals Tribunal may be appealed to the 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 undertakings appeal a cartel decision from the NCA, this will generally result in a single proceeding with multiple parties before the appeals body, the Competition Appeals Tribunal.
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 to render a decision imposing fines, while the undertaking concerned have the burden of proof for any efficiency gains pursuant to §10(3) of the Act (similar to TFEU Art. 101(3)).
Pursuant to the general case handling rules of the Norwegian Public Administration Act, the Competition Authority has an obligation to ensure that the facts of the case are sufficiently clear before rendering its decision. In application of this principle, the NCA acts as the primary finder of fact in cartel proceedings. However, an undertaking 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 appeal′s case, the Competition Appeals Tribunal or the competent court will review facts presented by both sides before rendering its decision.
There is no general ban on using evidence obtained in one proceeding being used in another under Norwegian law. However, each proceeding is decided based upon the facts of the case in that proceeding, meaning that evidence obtained in one proceeding may be challenged in another.
As an unannounced inspection, including seizure of documents, requires a court order, the NCA may not use such documents freely in other cases.
There are no formal rules of evidence under Norwegian law. Indeed, 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).
In the case of cartel violations, the NCA does not need to demonstrate any actual effects on competition. Economic experts 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 of 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 the police investigate other non-competition-related criminal offences, eg, the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime, which investigates serious economic fraud. In such cases, the prohibition against double jeopardy may prevent the ability of several agencies from sanctioning 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.
With regard to criminal sanctions, the court may impose prison sentences and criminal fines on individuals for wilful or gross negligent violations of the cartel prohibition pursuant to Section 32 of the Competition Act. The maximum prison sentence is three years, but sentences of up to six years may be imposed under aggravating circumstances.
Imprisonment has never been used for violations of the current competition law. Prior to 2004, however, 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 and modelled after 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 hardcore infringements such as cartel violations, it should not be expected that the Authority will accept remedies and close the case without an infringement decision.
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 may 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), co-operate actively with the relevant competition authorities and 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 may be criminal 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 2004, 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 may be imposed on both undertakings and individuals, while only undertakings may receive administrative fines for violations of the cartel prohibition.
Periodic penalty payments can be imposed where the undertaking or individual does not co-operate with the NCA, eg, by refusing to supply the 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 penalty and sets a maximum threshold for the fine of 10% of the undertaking's relevant turnover in its last fiscal year.
Several factors will be considered in the NCA′s assessment of whether sanctions or penalties should be imposed, including the existence of a compliance programme, its content, 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 undertaking 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 undertakings, 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 Appeals Tribunal, which is the mandatory body for appeal of the NCA′s decisions. After a case has been decided in the Competition Tribunal, it may be appealed to the Gulating Court of Appeal and then to the Supreme Court, however, subject to general limitations.
Criminal sanctions are reviewed through the ordinary court system. A criminal 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 may 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 tort law, three requirements must be fulfilled to be entitled to compensation:
A claim for compensation is brought before the ordinary Norwegian courts and may be appealed up to the Supreme Court, subject to the limitations that generally apply to 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 intended to constitute a more stringent evidentiary requirement.
Only compensatory damages may 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 formed as a class action in Norway. In theory, consumer associations or public interest groups may also raise a case, but only if it can prove 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. In addition, a large class action by an association representing Norwegian alarm customers has been brought against the residential alarm companies Verisure and Sector Alarm subsequent to a fine imposed upon Verisure and Sector Alarm by the NCA pursuant to breaches of applicable competition law. The case has not yet been heard in court.
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 they have 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 handled in accordance with the ordinary rules for civil litigation in the Dispute Act. The Norwegian court process is predominantly an oral process, with the evidence presented directly before the court.
Evidence from governmental investigations or proceedings is admissible in private civil litigation in Norway involving alleged cartels. As the general starting point, the parties may present any evidence they find relevant. However, business secrets and other information that fall under the NCA′s rules on professional secrecy are inadmissible without consent from the responsible ministry. Consent may 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.
In addition, there are exceptions for evidence without relevance to the case and for disproportionate amounts of evidence, which might be declared inadmissible by the court.
As mentioned, there has been a limited number of cases where damages have been sought in Norway, and none 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 if the case is appealed 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 the necessary costs associated with the case. The parties present their claims at the end of the oral hearing, and the court decides whether the winning party shall be awarded costs and, if so, the amount in the judgment. The amount granted is often lower than the claimed amount. The successful attorney′s fees are ultimately agreed between them and the client. It follows from the Norwegian Bar Association's legally binding Code of Ethics 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 must 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, which typically is 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 Section 10 of the Competition Act on its website.