Press release – The sale by Síminn of subsidised mobile phones, which could only be used on Síminn's mobile network, was a breach of competition law.

Og fjarskipti hf. (now Vodafone) lodged two complaints with the competition authorities in late 2004 concerning the actions of Landssíma Íslands hf. (now Símans hf.) in the market for mobile phone services.

On the other hand, it was complained that Síminn had phoned its customers who had requested a number port to Vodafone, and offered them various special deals in exchange for them cancelling the port. It was also complained that as requests for number porting began to be received, a number of customers requested to port to the Síminn because they had purchased subsidised mobile phones from the Síminn which were locked to the Síminn's network. Vodafone considered that the above-mentioned marketing practices of Síminn were a breach of the prohibition in Article 11 of the Competition Act against the abuse of a dominant position in the market.

The Competition Authority's decision, published on 30 April, states that the available data and information suggest that Síminn's offer was a response to Vodafone's actions in the market. It appears that the actions taken by Síminn were moderate as well as temporary. It is therefore not possible to regard Síminn's actions as having breached competition law in this respect.

However, Vodafone complained that Síminn had for some time been offering subsidised GSM mobile phones for sale which were locked to Síminn's mobile network. Vodafone argued that these subsidies constituted harmful undercutting and an illegal tie, amounting to a misuse by Síminn of its dominant market position.

Based on the data and information obtained, the Competition Authority has concluded that Síminn abused its dominant market position by subsidising locked GSM mobile phones for its own mobile network in 2003 and 2004. These measures were intended to maintain or strengthen Síminn's position in an undue manner in the market for GSM mobile phone services. It is also clear that the measures strengthened Síminn's position in the sale of GSM mobile phones. According to the above, the Competition Authority is of the opinion that Síminn breached Article 11 of the Competition Act through the aforementioned conduct.

Decision No. 17/2007.