Article | Last updated: 24/03/2015 | Ministry of Foreign Affairs
The EU’s rules for the internal market are designed to ensure the free movement of goods, services, capital and persons. The internal market cannot function without free and effective competition, which is ensured by the rules governing competition, public procurement and state aid. Norway is associated with the EU’s regulatory framework in this area through the EEA Agreement.
The EU/EEA rules for state aid, public procurement and competition lay the foundation for an effective and well-functioning internal market. The aim of these rules is to ensure efficient use of society’s resources and to create a level playing field for all economic actors in the EEA. The rules governing state aid are designed to prevent national authorities from favouring certain companies or industries at the expense of others. The procurement rules are designed to ensure that public funds are used in the best possible way through cost-effective and socially beneficial procurements, and that all tenderers in the EEA can take part in government procurement processes on equal terms. Under the competition rules, it is prohibited for enterprises to fix prices or abuse a dominant position. They also provide for a system for monitoring mergers to prevent an enterprise becoming so dominant that it restricts competition. The rules governing state aid are designed to ensure that a country does not favour its own industries through subsidies and thus restrict competition in the EEA.
The EU’s competition policy
The competition rules in the EU mainly regulate enterprises’ activities within the EU. The most important are:
- the prohibition against anti-competitive agreements and arrangements between enterprises, for example price-fixing and market-sharing,
- the prohibition against an enterprise abusing a dominant position, and
- the rules regulating mergers
The competition rules in the EU/EEA also apply to national tenders, and have precedence in major tenders of importance across national borders. Compliance with these rules in the EU countries is monitored by the European Commission; the EFTA Surveillance Authority (ESA) monitors compliance in the non-EU EEA countries.
The rules on state aid generally prohibit all forms of direct or indirect subsidies from the public authorities, whether at central, municipal or county level. There are a number of exemptions, and the European Commission has drawn up a guide to the application of the EU rules for determining what subsidies may be approved in individual cases. This guide covers areas such as regional aid and support for environmental measures, R&D and innovation. The rules on state aid help to ensure equal terms of competition and equal treatment and predictability, promote integration, and prevent cronyism and corruption, as well as contributing to economic efficiency and good governance.
The European Commission has played a key role during the financial crisis in ensuring that measures to address the crisis do not undermine the internal market, and has thus prevented a costly subsidy war between EU countries. ESA monitors compliance with state aid legislation in the EEA/EFTA countries. All state aid must be approved by ESA. ESA adapts the wording of the guidelines for the EEA/EFTA countries, and these also give an indication of how ESA interprets the provisions of the EEA Agreement.
The rules for public procurement cover procurement procedures from the planning stage to the signing of a contract. According to the rules, the procurement of all goods and services above a certain threshold value must be subject to open tendering. The aim is to ensure efficient use of resources in the public sector and to increase value creation in society as a whole. The rules are also intended to promote economic integration, ensure equal treatment and predictability, prevent corruption and cronyism, and lead to more professional public procurement routines.
Association with the EU through the EEA Agreement
The rules for state aid, public procurement and competition constitute a key part of the EEA Agreement, and Norway follows the same regulatory framework as the EU in these areas.
The rules for competition, state aid and public procurement apply for all sectors that are covered by the EEA Agreement. In addition, Norway has national rules that set national threshold values for the use of public procurement procedures. In a similar way, the EEA competition rules supplement Norwegian rules in the area of competition.
Individual cases of breach of the EU competition law are dealt with by the European Commission’s Directorate-General for Competition or by ESA on the basis of where the breach has impact. In cases that relate to the provisions on competition in the EEA Agreement, the Norwegian competition authorities take part in consultation processes and in meetings of the advisory committee, where the EU and EEA countries must be consulted before a decision can be taken.
The Ministry of Local Government and Modernisation chairs the EEA special committees on competition, state aid and public procurement, where other ministries also participate.
The Ministry of Local Government and Modernisation chairs the EFTA working groups on competition and public procurement and is vice chair of the working group on state aid. These working groups follow developments in the EU in their respective areas and have regular meetings with representatives of the European Commission, the European Parliament and the EU member countries.
Norwegian experts take part in the Commission’s committees and in expert and working groups that discuss cooperation in the areas of competition, state aid and public procurement, and the interpretation of the current legislation in these areas. This provides important opportunities to give input in connection with the development of EU strategy and the updating of rules, as well as opportunities to discuss the practical implementation of the current rules. An example here is Norway’s work to promote the use of e-procurement through its active engagement in the Commission’s Pan-European Public Procurement Online (PEPPOL) project. The Norwegian Competition Authority also takes part in the European Competition Network, which is an important instrument for strengthening dialogue between national competition authorities at the European level.
National experts in the European Commission
Contact information for all the Norwegian national experts can be found on the EFTA Secretariat’s website.