The Competition Authority has today taken decision to impose daily penalties on the Association of Catering Enterprises (SVEIT) for the association's breach of its legal obligation to provide data to the supervisory authority. The daily penalties are imposed to compel SVEIT to comply with competition law and provide the requested data.
The Competition Authority has concluded that SVEIT has failed to fulfil a clear legal obligation to provide data, thereby breaching Article 19 of the Competition Act. SVEIT shall pay daily fines. to the value of 1,000,000 kr. per day until the requested information has been submitted to the Competition Authority.
The background to this is that on 14 March 2025, the Competition Authority received a complaint from the Icelandic Trade Union Federation, the Efling Trade Union and the Icelandic Federation of Professional Associations regarding „Illegal price-fixing by companies in the catering market and illegal price-fixing within the Association of Catering Companies“It is therefore claimed that the conclusion of a collective agreement with the union Virðing, which provides for pay and conditions in the catering market, has contravened competition law. The complaint argues that the union Virðing is „bogus trade union“ and also that an exemption pursuant to paragraph 2 of Article 2 of the Competition Act from the scope of the Act for „wages or other terms of employment of employees in accordance with collective agreements“does not apply.
The Competition Authority decided to launch an investigation and requested data from SVEIT, certain SVEIT member companies and Virðing. Data has been received from Virðing and the SVEIT member companies to which the data request was addressed.
SVEIT has, however, repeatedly refused the Competition Authority's request for the submission of documents. The organisation has demanded that the Competition Authority's investigation into alleged breaches of competition law be dropped. In support of this, it is stated, among other things, that the Competition Authority has „no authority to initiate an investigation concerning the establishment of a trade union, the circumstances preceding the conclusion of a collective agreement, its content or validity, pursuant to Articles 1 and 2 of the Competition Act.“
The Competition Authority's decision on the daily fines points out that the exemption in paragraph 2 of Article 2 of the Competition Act from the scope of the law regarding wages or other terms of employment of wage-earners under collective agreements is, in competition law, subject to certain conditions. If the relevant agreement does not meet those conditions and is therefore not considered a collective agreement for the purposes of competition law, it may constitute an illegal concerted practice by the undertakings concerned and their associations regarding employees' pay (e.g. wage fixing).
Such infringements contravene Article 10 of the Competition Act, pursuant to Article 12 of the Act, and are generally considered serious and liable to cause damage. The competition authorities' investigation in such cases involves, amongst other things, assessing whether or not a genuine collective agreement is in place. The provisions of Article 19 of the Competition Act grant the Competition Authority extensive powers to request all necessary documents for the purposes of its investigation.
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