Following the decision of the Competition Authority No. 29/2025, Landsvirkjun's illegal price pressure on the electricity market, The CEO of Landsvirkjun published an article on the company's website on 22 August, under the headline „The Competition Authority's position is expensive for consumers.“ The article misrepresents certain key points of the matter. In the interest of an informed debate, it is therefore necessary to make the following points:
1) The Competition Authority has at no stage required Landsvirkjun to cease participation in Landsnet's tenders.
The article claims that Landsvirkjun was „…forced to stop participating in tenders…“ and that „…due to the actions of the Competition Authority…“ if users have had to pay „…an additional 1.3 billion króna…“
At no stage of the case did the Competition Authority instruct Landsvirkjun to cease its participation in the tenders. This was emphasised in discussions about a possible settlement in the case.
On the other hand, it is clear that Landsvirkjun's pricing must be in accordance with the obligations that rest on companies in a dominant market position. This is what the decision addresses. If electricity consumers have suffered damage as a result of Landsvirkjun's decision not to participate in Landsnet's tenders, the company itself is responsible for it.
The Competition Authority sought an explanation from Landsvirkjun regarding the aforementioned statements, by email to the company's lawyer on 22 August, but no response has been received.
2) The subject matter of the conciliation talks is being mishandled.
In an article by the CEO of Landsvirkjun, it is argued that the settlement negotiations with the Competition Authority have been about„…Landsvirkjun would of course be prepared to follow its instructions and adapt to the definitions it put forward.“ The text then says: „However, accepting a fine was never an option, as in our opinion, no laws were broken.“
This is not correct. Conciliation talks are never initiated with the Competition Authority for the sole purpose of setting out guidance on the interpretation and application of competition law. At the outset of the aforementioned settlement discussions, the CEO of Landsvirkjun signed a statement confirming that the company requests settlement discussions and that the subject of those discussions is the potential admission of an infringement, a possible administrative fine and possible measures to promote competition.
All of the above matters were discussed in the talks, but they concluded without a result.
However, if Landsvirkjun requested negotiations for the sole purpose of seeking guidance, this runs counter to the aforementioned statement. It also entails that the Competition Authority was misled into agreeing to the negotiations.
3) On „intermediaries“ – the content of the decision has been incorrectly handled
The author of the article appears to believe that the decision of the Competition Authority is based on „…on the (mis)understanding that competition law is intended to protect intermediaries who resell a product they do not manufacture themselves, by adding a mark-up, so that the buyer pays a higher price than would otherwise be the case.“
It is therefore necessary to point out that Landsvirkjun's infringement not only affected competitors who are solely engaged in the sale of electricity, but also those who are engaged in both production and sale, whilst also purchasing electricity from Landsvirkjun in order to be able to operate in the relevant markets. Thus, one of the two complainants in the case is engaged in both the generation and sale of electricity.
Furthermore, it is recognised in European competition law that the activities of non-producing electricity suppliers are important for competition and development in electricity markets. Furthermore, so-called intermediaries (e.g. wholesalers or retailers) operate in most markets and play an important role there. Examples include the grocery market, the telecommunications market, the banking market, etc.
It should be borne in mind that Landsvirkjun has a significant advantage over other competitors in Icelandic production. If the price pressure exerted by a company in such a position is allowed to go unchallenged, there is little chance that effective competition will gain a foothold in the electricity market. In the long term, the public and businesses have a clear interest in competition being protected and in preventing a dominant firm from placing obstacles in the way of smaller competitors.
4) The unlawful price pressure exerted by Landsvirkjun will not be justified by considerations of electricity security.
The article states that the Competition Authority has „Repeatedly criticised Landsvirkjun for mixing energy security into the debate on trading with transmission losses, as it is not their role.“
This is not correct. There is no legal obligation on Landsvirkjun to ensure an adequate supply of electricity. There is no disagreement on this point. Furthermore, the Competition Authority has not objected to Landsvirkjun considering energy security in its operations. However, the case did examine whether the principle of energy security could justify Landsvirkjun's pricing. It was concluded that this was not the case, as there was no shortage of electricity supply during the period under investigation. Indeed, Landsvirkjun participated in all tenders during the period and subsequently ceased participation without a system collapse having occurred.
5) In its 2016 competition policy, Landsvirkjun had noted that the sale of electricity due to transmission losses could be considered a separate market, and that Landsvirkjun was dominant in it.
The article states that the market for transport losses has never been defined in this country and that the Competition Authority ultimately concluded that it was at the retail level.
According to internal documents, Landsvirkjun itself had noted that the competition authorities were likely to define sales due to transmission losses as a separate, distinct market, in cases where a party's conduct concerns the relevant service element. Furthermore, it was likely that the competition authorities would consider Landsvirkjun to be dominant on that market. This is stated in Landsvirkjun's competition law programme from 2016, which discusses this in Article 191 of the decision of the Competition Authority.
The main issue is that the market for transmission losses is a distinct market, and Landsvirkjun was obliged to conduct its pricing in that market in a way that did not harm the competition that existed there. The company's competition policy, which was drawn up before the period of infringement under investigation began, indicates that Landsvirkjun was aware of its position and its obligations in this regard.
"*" indicates required fields
