Member Article

The Norwegian Ministry of Trade, Industry and Fisheries has adopted a new regulation exempting the transport sector from the prohibition in Section 10 of the Norwegian Competition Act; cf. FOR-2020-03-18-340.

Section 10 is the national equivalent to Article 101 TFEU and 53 EEA. The new rules are set to apply for three months but may be prolonged or shortened, depending on how the ongoing covid-19 pandemic evolves.

Section 1 in the new regulation provides (our translation):

"The prohibiton in Section 10 of the Competition Act does not apply to anti-competitive agreements within the transport sector, insofar as necessary in order to maintain criticial functions for society in connection with the covid-19 pandemic.

Cooperation exempted under the first paragraph must not go further than what is strictly necessary to achieve the objective of the exemption. Efficient use of resources and the interest of consumers must be ensured to the fullest extent possible.

Cooperation under the first paragraph must be notified to the Norwegian Competition Authority without undue delay. The notification must contain information on who the cooperating undertakings are and briefly describe the nature of the cooperation."

Competition law continues to apply in times of crisis, but exceptional circumstances call for extraordinary measures. As the legislator notes in its comments to the new rules, the exemption seeks to maintain the transport of persons and goods in Norway critical to the life and health of citizens.

The new regulation aims to provide the transport sector, including the airline industry, with a temporary "safe harbour". Outside of such regulations, the point of departure is still that anti-competitive agreements are caught by Section 10 (1) of the Competition Act, regardless of their "noble cause" of trying to overcome e.g. demand shocks or over-capacity in the market; cf. for instance Irish Beef ruling (C-209/07) of the European Court of Justice.

Still, the exceptional situation at hand could allow for limited cooperation agreements between competitors also outside of this specific regulation, based on an individual assessment of pro-competitive effects under Section 10 (3) of the Competition Act. Even if there is no such thing as a general "crisis cartel" exemption – neither under EU/EEA nor Norwegian competition law –  competition authorities have to some extent accepted restrictive agreements aiming to remedy, e.g., over-capacity in the past. Case-specific assessments may result in similar findings in today's setting.