Eimskip withdraws its case against the Competition Authority

The Reykjavík District Court today heard the case of Eimskip against the Competition Authority, which the company had brought to prevent the Authority's investigation into alleged illegal collusion between the company and Samskip. During the hearing, it was announced that Eimskip has now decided to withdraw the case.

The background to the case is that on 1 July 2019, Eimskip demanded that the Reykjavík District Court rule on that on the one hand that the Competition Authority's investigation into the company's alleged illegal collusion with Samskip was unlawful and that it should be discontinued and however that the seizure placed on the company's data during searches on 10 December 2013 and 4 June 2014 would be lifted, and that copies of the data would be destroyed.

In support of its claims, Eimskip has argued, among other things, that the investigation of the case has taken an unreasonably long time, that the Competition Authority has misled the courts, that the seizure of evidence during the searches was unlawful and that the competition authority's staff are biased, as they had participated in a police investigation into the role of Eimskip's management in the alleged collusion. Eimskip has also argued that the Competition Authority violated its human rights, in particular because the authority discontinued an investigation into the alleged offences but then continued it. The Competition Authority has argued in court that there is no merit in Eimskip's case.

The outcome of Eimskip's legal proceedings has been as follows:

Eimskip's demand that the investigation be dropped:

• Eimskip's legal action against the Competition Authority in July 2019 was based on the Code of Criminal Procedure. The Competition Authority considered that there were no grounds for Eimskip's claims and that the Code of Criminal Procedure was not applicable. The Authority sought a dismissal of the case.
• On 10 October 2019, the Reykjavík District Court dismissed the aforementioned claim by Eimskip, and by a ruling on 24 October 2019, the Court of Appeal upheld the district court's decision.
• Eimskip then decided in November 2019 to bring a civil action against the Competition Authority, which the company has now decided to withdraw. Eimskip's claims in the case were based, in essence, on the same arguments as in the case the company pursued under the Criminal Procedure Act. The Competition Authority also considered this lawsuit by Eimskip to be without merit and moved for its dismissal.
• The case was due to be transferred today following the Competition Authority's demand that it be referred from the district court. However, as previously stated, Eimskip decided to drop the case.

The requirement for search warrant evidence:

• By a ruling on 18 December 2019, the Reykjavík District Court rejected Eimskip's request that the Competition Authority be ordered to destroy or return data obtained during a search at the company's premises. Eimskip appealed the ruling to the Court of Appeal.
• By its ruling of 30 January 2020, the Court of Appeal upheld the ruling of the Reykjavík District Court. The ruling did not accept Eimskip's view that the Competition Authority's investigation was unlawful. Reference was also made to the fact that the case file shows the Competition Authority's investigation into the alleged collusion is very extensive and that its conclusion is still some way off. It is therefore understandable that the Competition Authority continues to hold Eimskip's documents.

Background information

The Competition Authority's investigation focuses on whether Eimskip and Samskip have engaged in illegal collusion in the markets for sea freight, freight forwarding and land transport, in violation of Article 10 of the Competition Act and Article 53 of the EEA Agreement. This investigation was launched following tips from both customers and competitors of Eimskip and Samskip.

The Competition Authority has been investigating the companies„ potential breaches continuously, and the investigation is well advanced. Among other things, the Competition Authority has given the companies the opportunity to comment on the Authority's preliminary assessment, as it safeguards the companies' right of reply in cases of this nature by issuing a so-called notice of objections. The Competition Authority's procedural rules state that in a statement of objections, "The main events of the case shall be described and the basis for it reported in outline, that certain circumstances or conduct may contravene the provisions of competition law..“

Eimskip and Samskip have been given an opportunity to exercise their right of reply in two phases. The first notice of objection was served on the companies on 6 June 2018, and they were invited to submit their comments and views. Samskip has not exercised its right to comment on this statement of objections. Eimskip repeatedly requested an extension of time but submitted its comments on 16 March 2020. The second objection document was published to the companies on 13 December 2019. No comments were received from the companies within the originally given deadline, and they have again requested an extension.

This case is being prioritised by the Competition Authority. The scale of the investigation, including the volume of underlying data, is unprecedented in the investigation of competition matters in this country.