In the decision of the Competition Authority No. 20/2006 On 16 June 2006, Skífan was found guilty of abusing its dominant market position, thereby breaching the prohibition provisions of the Competition Act. Skífan did this by entering into unlawful agreements with Hagkaup concerning the sale of CDs and computer games, in 2003 and 2004 respectively, both of which involved exclusive purchasing arrangements and anti-competitive discounts. Exclusive purchasing in this context refers to Hagkaup's commitment to purchase a specified, high proportion of all the relevant products exclusively from Skífan. The agreements effectively excluded Skífan's competitors in the wholesale of the specified products from doing business with Hagkaup, a major retailer of, among other things, compact discs. This constituted a repeated breach by Skífan of competition law. The Skífan's previous infringement was addressed in a competition council decision from 2001 and a Supreme Court judgment from 2004. Skífan's breach of competition law for which it is now being sentenced was more extensive than the company's previous infringement. In its decision, the Competition Authority ordered Degi Group ehf. (formerly Skífan) to pay an administrative fine of 65 million króna.
Dagur Group ehf. (formerly Skífan, now Árdegi ehf.) appealed this case to the Competition Appeals Board, which issued its own ruling. No. 4/2006 22 September 2006. In a ruling, the Appeal Board upheld the decision of the Competition Authority. The panel considered that Skífan's infringement was both obvious and serious, and that the company's representatives must have been aware that the agreements in question contravened competition law and the Competition Council's decision from 2001. The Competition Authority's decision on the amount of the administrative fines was also confirmed. By judgment of the Reykjavík District Court In October 2007, the decision of the Competition Appeals Tribunal was confirmed.
The above-mentioned breaches are confirmed in the Supreme Court's judgment today. The Supreme Court considered the offences to be extensive, serious and long-standing. It was also clear that the fine imposed on Skífan in the earlier case had not had a deterrent effect. The Supreme Court therefore confirmed that a fine of 65 million króna must be paid for the offences.
In the decision No. 9/2006 On 27 March 2006, the Competition Authority concluded that the Ground Handling Service at Keflavik Airport (IGS), a subsidiary of FL Group (now Icelandair Group), had abused its dominant market position in the handling of passenger aircraft. The company breached Article 11 of the Competition Act when it entered into 10 exclusive agency agreements with airlines flying into Keflavik Airport and by making a competitively restrictive offer to the airline LTU. The Competition Authority ordered the company to pay a statutory fine of 80 million krónur to the state treasury. In July 2006, the Competition Appeals Board confirmed this with a ruling No. 3/2006 the conclusion of the Competition Authority that IGS had abused its dominant market position, but decided that the administrative fine should be 60 million kr.
IGS then brought a case before the Reykjavík District Court, demanding that the appeal board's ruling be overturned or that the administrative fine be cancelled or significantly reduced. With judgment of 24 September 2007 The District Court dismissed these claims by IGS. The court found that IGS had breached competition law and that the imposed fine was in line with the severity of the company's offences.
The Supreme Court upheld the aforementioned offences and noted that IGS had, through unlawful actions, targeted its only competitor, which was in a vulnerable position. However, the Supreme Court considered a fine of 40 million króna to be appropriate for IGS.
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