Norwegian Merger Control: More scrutiny of transactions falling below the thresholds for mandatory filing?

Filing to and pre-closing approval from the Norwegian Competition Authority (“NCA”) is required for concentrations where the parties meet certain turnover thresholds, with exception for transactions meeting the EUMR thresholds. In addition, the NCA has the power to order notifications - and potentially prohibit - any concentration falling below the turnover thresholds for mandatory filing as well as transactions of minority interests. This may significantly impact the parties to a transaction, as an order of notification may postpone closing and in worst case lead to the transaction being blocked, which the NCA can do even after closing.


The NCA has used its competence to order notification on several occasions since it was provided with this power in 2014, with an increasing rate of orders the last couple of years. In 2022, the NCA ordered notifications of three transactions falling below the thresholds. Two were cleared in Phase II, while one was recently prohibited.

It is also worth noting that the NCA was one of five countries joining France in their referral request in 2021 to assess the proposed acquisition of GRAIL by Illumina under the EUMR. Norway joined this referral regardless of the transaction not meeting the Norwegian turnover thresholds.

The most prominent case following a notification order was Schibsted, the owner of Norway’s largest digital marketplace in, acquiring the online auction platform for used cars Nettbil. The case came to a close earlier this year when we saw the first ruling from the Norwegian Supreme Court in a merger control case called in by the NCA. The court decided to annul the decision to prohibit Schibsted’s acquisition of Nettbil.

Another important ruling this year potentially further increasing the risk of intervention against transactions falling below the thresholds for mandatory filing is the European Court of Justice’s judgement in C-449/21 Towercast, finding that national authorities and courts may review concentrations under the abuse of dominance rules. These recent developments illustrate the importance of being aware of competition law risks also when handling transactions falling below the thresholds for mandatory filing, especially within markets where complaints are likely or the NCA has a particular interest.


The Norwegian Competition Act

Compulsory notification where turnover thresholds exceeded

Where at least two parties to a concentration receive revenue in Norway of at least NOK 100 million and the parties have a combined Norwegian turnover of at least NOK 1 billion, a notification must be submitted. Further, the parties to the transaction will not be allowed not complete the transaction until approval from the NCA is obtained.

The NCA’s power to order notifications

Under the Norwegian Competition Act the NCA can order notifications both for concentrations below the turnover thresholds and for acquisition of non-controlling shareholdings if there are reasonable grounds to assume that competition will be negatively impacted, or if there otherwise are significant reasons for the NCA to investigate the concentration further.

The “reasonable grounds” threshold is low, giving the NCA a significant discretion when deciding which concentrations below the threshold it wants to investigate further.

A decision to order notification must be made within three months from the date of 1) the final agreement leading to the concentration or 2) control has been acquired (whichever comes first). This is a hard limit and not subject to the NCA being informed directly or indirectly about the concentration.

Before ordering a notification the NCA must send a reasoned notice, to which the parties will be given an opportunity to respond. If the NCA still considers that the criteria for ordering are met, a formal notification order will be issued. A formal notification order cannot be challenged.

A standstill obligation is not imposed before the NCA orders notification. The transaction may therefore already be closed when the order is received. This in contrast to transactions subject to mandatory notification, which are subject to a full standstill obligation until the NCA’s approval. If the transaction is already closed when the order is issued, the parties may be prohibited from further integration. Breaching this stand-still obligation is subject to potentially severe fines. If the transaction is closed when the NCA orders notification and ends up being prohibited, the buyer will typically be forced to sell the acquired company.

Disclosure requirements for specific markets

To detect transactions that could qualify for further review, the NCA has ordered several companies to provide information about any transaction below the thresholds.  Some of these orders also include requirements to inform the NCA of minority acquisitions. The trend today is that disclosure orders include requirements to inform about minority acquisitions above 5 %.

The companies currently subject to disclosure requirements by the NCA are typically operating in concentrated markets receiving particular attention from the NCA, many subsequent to a merger control investigation. These markets include groceries, sports equipment, retail fuel, waste management, ready-mix concrete and online marketplaces. A full list of markets and companies can be found here.


Risk enhancing factors

The NCA has ordered notifications in transactions below the filing thresholds in ten cases since 2014, with three of the orders being issued in 2022. Of the ten transactions called in, two was prohibited by the NCA. Two cases were withdrawn by the parties after the NCA initiated investigation and six were approved by the NCA, of which one was approved on conditions. Notification orders are rarer for acquiring of non-controlling shareholdings, occurring only twice since 2014.

In May 2023, the NCA prohibited ØB Group’s acquisition of Betongvarer. While ØB Group is a national supplier of ready-mix concrete, the target business was only present in a small local market, demonstrating that the NCA’s long-standing attention to effects on competition even in small, local markets remain. The other two cases called in in 2022 were Axess Logistics AS’ acquisition of Auto Transport Service AS (car logistics) and SKion Water International GmbH’s acquisition of Enwa AS (water treatment services and equipment). Both were however unconditionally cleared after the NCA had opened Phase II investigations.

The most prominent case called in by an order from the NCA is the media conglomerate Schibsted’s acquisition of Nettbil. Schibsted owned Norway’s largest digital marketplace in, whilst Nettbil was a start-up providing an online service for the sale of used cars.

The acquisition of Nettbil by Schibsted took place in December 2019. Due to Nettbil’s limited turnover, the acquisition was not subject to mandatory filing. However, after the deal was completed, the NCA used its power to order notification, leading to a prohibition decision in November 2020. Schibsted appealed the decision to the Competition Appeals Tribunal (“CAT”), who upheld the prohibition in a decision of May 2021. In March 2022, Gulating Court of Appeal annulled the prohibition decisions issued by the NCA and CAT. On 16 February 2023 the Supreme Court sided with the Court of Appeal and the decisions issued by the NCA and CAT to prohibit Schibsted’s acquisition of Nettbil were decisively annulled.

The Schibsted – Nettbil case illustrates certain risk factors which can affect the likelihood the NCA ordering notification:

  • First, Schibsted’s online platform Finn was the clear leading service for online classifieds for secondhand cars.
  • Second, Nettbil was viewed as an innovative player with a large potential for growth and the potential to challenge Finn’s market position. This illustrates that notification orders can be used by the NCA as a tool against the so-called “killer acquisitions”, where large entities acquire typically innovators to eliminate a nascent competitor.
  • Third, the nature of the affected market may trigger the interest of the NCA. As most competition authorities, the NCA is closely following online platform markets typically characterised with high network externalities, and in particular transactions where existing platform services acquire innovative services which may challenge their market position. Schibsted is currently subject to disclosure requirements both in the newspaper markets and within digital marketplaces, indicating a strong interest by the NCA in two markets where Schibsted is considered to hold a strong position.

Other types of transactions can however also be subject to notification orders, as illustrated by the abovementioned cases Access Logistics – Auto Transport Service and SKion – Enwa. In both these cases the relevant markets were small and concentrated with high combined market shares. Both these cases, and the concrete case mentioned above demonstrate that also transactions where companies have relatively small revenues in small markets can catch the NCA’s interest if discovered.

Other factors increasing the risk of a notification order are the NCA receiving anonymous tips or complaints, typically from a customer or a competitor indicating that a transaction will cause harm to competition, and the NCA receiving tips from other NCA’s to look closer into a transaction. Tips or complaints can make the NCA aware of transactions they otherwise would not discover in time to order notification. The likeliness of the NCA acting upon tips and complaints will increase if substantiated. Tips or complaints are often decisive when transactions in smaller markets become subject to notifications orders, as these transactions rarely are discovered through for example disclosure requirements from the NCA or news coverage. The NCA has acted following anonymous tips in previous cases.


What should companies do?

Although the NCA still orders notifications quite rarely, it is important to be aware of the risk, in particular for transactions where companies holding a significant market position acquires actual or potential rivals. Transactions catching significant media attention may also increase the risk of an order for notification. An unexpected full merger review, which could in the end lead to a prohibition, will create significant uncertainty and costs over a long period of time.

To mitigate the potential inter-party consequences of the NCA ordering a notification it is important to reflect this risk in the transaction agreement by including wording on how an order will impact closing, risk allocation between the parties, long-stop date for the transaction and potentially a right for the buyer to return the target to seller if the transaction is blocked after the deal is closed.

Where there is a significant risk of notification order or where a deal is of particular importance, it could also be advisable to submit a voluntary notification. Norway is one of only a few countries in the EEA where voluntary filing is an opportunity. The NCA’s case handling in uncomplicated merger notifications is swift, where clearance normally is received within 2-3 weeks from notification and without a required prenotification process. It should be noted that the NCA in our experience sometimes are nudging the parties to submit a voluntary notification in cases where it considers ordering notification, which may save time both for the authority and the parties. Another opportunity is to just inform the NCA about the transaction up front, to avoid that a notification order is received towards the end of the NCA’s three months deadline.


Impact of the Towercast judgement

On 16 March 2023 the European Court of Justice ruled that national competition authorities and courts can review non-notifiable concentrations under the abuse of dominance rules. The consequences of abuse of dominance being found in these cases can for example be fines and a requirement to divest the acquired company.

In Norway, this opportunity will however probably be limited and only relevant for transactions identified by the NCA after its three months deadline for ordering notification has expired, given that abuse of dominance is a more stringent test than the SIEC-test (significant impediment of effective competition) applied under the merger control rules. It can even be questioned whether the abuse of dominance rule is applicable at all for transactions under the thresholds in Norway, given that both the power to order notification and the opportunity to apply the abuse of dominance rules, are meant to fill the same “gap” in opening for intervention against harmful concentrations below the turnover thresholds.


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