The Norwegian Competition Authority has today warned St1 Norge AS in a statement of objections that it considers imposing a fine of NOK 15 million on the company for breach of disclosure requirements when it took control over a petrol station belonging to a competing chain.
In July 2018, St1 Norway signed an agreement to lease the Best Kyrksæterøra petrol station in Heim municipality in Mid-Norway. The deadline for informing the Competition Authority about the transaction expired three working days after the final agreement was concluded. St1 Norway informed the Authority of the agreement on 14 January 2019. The Competition Authority’s preliminary assessment is that St1 Norway has not complied with its disclosure obligations in connection with the conclusion of this agreement.
An important tool in the fuel market
The Norwegian Competition Authority has imposed disclosure requirements on the largest motor fuel retailers obliging them to inform the Authority about transactions whereby they take control over competing petrol stations. Such disclosure requirements, which apply to transactions that are not subject to mandatory notification under the Competition Act, have been imposed on St1 since 2017.
– Motor fuel retailing markets in Norway are very concentrated. Acquisitions of individual petrol stations by the large retail chains may increase market concentration in local markets. This may harm competition and lead to higher prices for consumers. The disclosure requirements are an important part of the Authority’s monitoring of the structure and the degree of concentration in the motor fuel retailing markets. If disclosure requirements are not complied with, it becomes more difficult for the Authority to monitor competition in an efficient manner in this sector, says Director General Lars Sørgard.
St1 did not provide information within the deadline
– St1 did not inform the Competition Authority about the transaction within the deadline set by the Authority, which expired three working days after the conclusion of the final agreement. Our preliminary assessment is therefore that St1 has violated the applicable disclosure requirement. Due to the lack of information, the Authority was not given the opportunity to review this transaction. In order for the fine to have sufficient deterrent effect, and thereby to contribute to an effective control of structural changes in the motor fuel retailing sector, the fine the Authority considers imposing is significant, says Director Hanne Dahl Amundsen.
This is the second case in a relatively short period of time in which the Competition Authority considers imposing a fine for a company’s breach of disclosure obligations.
– The Authority takes this type of violations seriously, in particular in those cases where the Authority, due to the lack of information, is not given the opportunity to order notification of the transaction in question. We will therefore continue monitoring closely that those who are obliged to disclose mergers and acquisitions to us, comply with the set deadlines, says Sørgard.
The Norwegian Competition Authority wishes to make clear that the findings in a statement of objections are preliminary, and that a final decision has not yet been adopted in this case.
– A statement of objections has now been presented to St1 who will have the opportunity to submit its comments to the Authority’s objections before any decision is made, says Amundsen.
ST1 has been invited to submit its comments on the statement of objections by 12 August 2020.
Disclosure requirements for mergers and acquisitions in specific markets
– The Authority may impose disclosure requirements on individual firms with regard to mergers, acquisitions and agreements by which they acquire control of other companies in specific markets where competition is weak and/or markets concentrated.
– Section 24 of the Competition Act is the legal basis for issuing disclosure requirements.
– Disclosure requirements ensure that the Competition Authority is made aware of acquisitions and such by the operators concerned, even if the regular notification thresholds are not met. Such information will enable the Authority to assess whether it is appropriate to require notification of these transactions.
– Disclosure requirements are useful because, in some markets, also acquisitions of smaller businesses may affect competition negatively and lead to higher prices and lower quality for consumers.
The Authority has imposed disclosure requirements in markets where the degree of local competition is of particular importance.
– Currently, the following market players are required to inform the Authority about mergers and acquisitions:
• Motor fuel retailing: Uno-X Energi AS, St1 Norge AS, Certas Energy Norway AS and Circle K Norge AS
• Electricity generation: Statkraft AS, BKK AS, Skagerak Energi AS and Agder Energi AS
• Waste management and recycling: Norsk Gjenvinning Norge AS
• Grocery store chains: Norgesgruppen ASA, Coop Norge SA, Rema 1000 and Bunnpris IK Lykke AS
• Locksmith services: AssaAbloy Norge AS
• Newspapers: Amedia AS, Polaris Media ASA and Schibsted ASA
• Broadband services: Telenor ASA
• Home security systems: Verisure AS and Sector Alarm Group AS
• Laundry services: Nor Tekstil AS
• Garden centres: Plantasjen Norge ASA
• Suppliers of concrete: Nordic Concrete Group AS, Heidelberg Cement Norway AS and Unicon AS
• Accounting systems: Visma AS
The Norwegian Competition Authority is continuously assessing whether there is a need to introduce disclosure requirements for additional market players and in other markets.
Hanne Dahl Amundsen
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