Key data
| Regulation | Decision of the EFTA Surveillance Authority No. 019/26/COL |
|---|---|
| Publication | 16 July 2026 (Official Journal of the EU) |
| Entry into force | 4 February 2026 |
| Company under investigation | Farice (Icelandic submarine fiber optic cable operator) |
| Country | Iceland |
| Legal framework | Agreement on the European Economic Area (EEA) |
| Category | European Regulation — State Aid |
| Type of procedure | Formal investigation procedure |
Companies in the telecommunications and digital infrastructure sector operating in the European Economic Area face a relevant situation: the EFTA Surveillance Authority has opened a formal investigation procedure against Farice, the Icelandic company that operates submarine fiber optic cables, for alleged illegal state aid. Decision 019/26/COL, adopted on 4 February 2026 and published on 16 July 2026, launches a process that can end with the obligation to recover the aid and, consequently, alter competition conditions in the EEE digital infrastructure market.
For Farice's competitors and for any company in the sector operating in the EEE, this procedure opens a window for active participation: interested parties can submit observations during the formal investigation phase.
What does this regulation establish?
Decision 019/26/COL of the EFTA Surveillance Authority (ESA, European Free Trade Association Surveillance Authority) formally opens an investigation procedure to determine whether the state support measures received by Farice are compatible with the competition rules of the Agreement on the European Economic Area (EEA).
The procedure follows the standard logic of state aid control in the EEA:
- The Surveillance Authority assesses whether the support measures granted by the Icelandic State to Farice constitute state aid within the meaning of the EEA Agreement.
- If it is concluded that the aid is incompatible with the EEA internal market, the Icelandic State could be required to demand the recovery of the amounts granted to Farice.
- During the formal procedure, interested parties —including competitors, customers and other sector operators— can submit observations to the Surveillance Authority.
Farice is an Icelandic company that operates submarine fiber optic cables, critical infrastructure for Iceland's digital connectivity with the rest of Europe. State support for this type of operator can distort competition if it does not meet the requirements of the EEA regulatory framework.
Economic and operational impact
Although the investigation directly affects Farice and the Icelandic State, its consequences have broader reach for the sector:
- For Farice: The most immediate risk is the obligation to repay the aid received if the Surveillance Authority declares it incompatible. This can affect its financial position and its capacity to invest in infrastructure.
- For competitors in the EEE: If the aid is confirmed as illegal, a competitive distortion is corrected. Operators who have competed at a disadvantage against Farice could recover market share or access to contracts.
- For the digital infrastructure market: The procedure sets a precedent on how aid to submarine cable operators in the EEE is evaluated, a strategic segment for European connectivity.
- For interested parties: The opening of the formal procedure activates the right to submit observations, allowing competitors and other actors to influence the outcome of the investigation by providing relevant information.
Who does it affect?
- Farice (Iceland): Company directly under investigation. Faces the risk of aid recovery if declared incompatible.
- Icelandic State: Could be required to demand the return of aid granted to Farice.
- Telecommunications operators in the EEE: Companies that compete with Farice in the submarine cable infrastructure or digital connectivity market in the EEE.
- Digital infrastructure operators: Companies in the sector that may have been affected by competition conditions resulting from aid to Farice.
- Legal advisors and consultants specialized in competition and state aid: Must be aware of the procedure to advise sector clients.
- CFOs and executives of companies with operations in the EEE: Especially those in telecommunications, digital infrastructure and connectivity sectors.
Practical example
Imagine a telecommunications operator based in Norway (EEE member country) that has competed with Farice in the submarine cable connectivity market between Iceland and continental Europe. If this operator believes that the state aid received by Farice has created a competitive disadvantage for it —for example, because Farice has been able to offer lower prices or more favorable conditions thanks to public support—, this formal procedure opens a concrete course of action for it:
- It can submit formal observations to the EFTA Surveillance Authority during the investigation phase, providing data on the competitive impact suffered.
- If the Surveillance Authority concludes that the aid is illegal and orders its recovery, the competitive distortion would be corrected, improving market conditions for this operator.
This same scheme applies to any EEE company operating in sectors related to digital infrastructure and that may have been affected by competition conditions resulting from state support to Farice.
What should companies do now?
- Evaluate whether your company competes with Farice in the submarine cable infrastructure or digital connectivity market in the EEE. If so, this procedure directly affects you.
- Consider submitting observations to the EFTA Surveillance Authority during the formal procedure. It is your right as an interested party and can influence the outcome of the investigation.
- Document the competitive impact that aid to Farice may have had on your company: loss of contracts, price pressure, difficulties in accessing the market.
- Consult with a specialist in EEE competition law and state aid to determine whether you have sufficient basis to submit observations or initiate additional actions.
- Monitor the progress of the procedure: if the Surveillance Authority declares the aid incompatible, it could open the possibility of claiming damages before national courts.
Frequently asked questions
What is EFTA Decision 019/26/COL and what does it mean for Farice?
It is the decision adopted on 4 February 2026 by the EFTA Surveillance Authority that opens a formal investigation procedure into alleged state aid received by Farice, an Icelandic submarine fiber optic cable operator. If the aid is declared incompatible with the EEA Agreement, Farice could be required to repay the amounts received from the Icelandic State.
How can Farice's competing companies submit observations?
Interested parties —including competitors and other sector operators— can submit observations to the EFTA Surveillance Authority during the formal investigation procedure opened by Decision 019/26/COL. It is recommended to act with legal advice specialized in EEE competition and state aid.
What happens if the Surveillance Authority declares Farice's aid incompatible with the EEA?
If the Surveillance Authority concludes that the aid is incompatible with the Agreement on the European Economic Area, the Icelandic State would be required to demand the recovery of the aid granted to Farice. This would correct the competitive distortion in the EEE digital infrastructure market.
Does this investigation affect telecommunications companies outside Iceland?
Yes. Although the investigation focuses on Farice and the Icelandic State, it has direct relevance for any company in the telecommunications and digital infrastructure sector operating in the EEE that has competed with Farice. These companies can participate in the procedure and could benefit from an eventual order to recover aid.
When did this procedure enter into force and when was it published?
The formal investigation procedure was initiated on 4 February 2026, the date of adoption of Decision 019/26/COL. The decision was published in the Official Journal on 16 July 2026.
Official source
Consult full regulation in official source
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://eur-lex.europa.eu/./legal-content/AUTO/?uri=OJ:L_202601693