In an interim decision today, the Competition Authority has ruled that the representatives of Teymi hf. on the board of IP-fjarskipti hf. (Tal) must step down, and that two independent individuals, to be nominated by the Competition Authority, shall be appointed in their place. Furthermore, specific provisions in the agreement between Tal and Vodafone concerning Tal's access to Vodafone's mobile network have been declared invalid on the grounds that they are contrary to the Competition Authority's decision. No. 36/2008 The merger of Teymir hf. and IP-fjarskipta ehf. and the provisions of Article 10 of the Competition Act.
In its interim decision, the Competition Authority concludes that Teymi, Vodafone and Tal have probably breached the Competition Authority's decision. No. 36/2008 and Article 10 of the Competition Act by having reached an agreement that Tal should focus on younger target groups and not compete with Vodafone. The Competition Authority also concludes that it is likely that certain provisions in the virtual network agreement between Tal and Vodafone regarding Tal's access to Vodafone's mobile network are intended to secure the interests of Vodafone and Teymi, which is contrary to the Competition Authority's decision. No. 36/2008. The Competition Authority believes that the agreement could reduce the competition that Tal is able to engage in within the market, and would therefore contravene the provisions of Article 10 of the Competition Act.
The Competition Authority considers it likely that representatives of Teymi have acted against Tal's competitive independence, and therefore it is necessary to make changes to Tal's board. Otherwise, there is a risk that Teymi and Vodafone could permanently weaken Tal as a competitor in the market.
The provisional decision of the Competition Authority is valid until 1 September 2009..
Background information
The Competition Authority conducted a search of the premises of Teymi, Vodafone and Tal on 7 January. The Competition Authority had obtained a search warrant in accordance with the law, and documents were seized from the companies concerned. On 7 January, the Competition Authority received a request from Síminn demanding an interim decision, inter alia, regarding the agreement between Tal and Vodafone concerning Tal's access to Vodafone's mobile network. On 9 January, the Competition Authority informed the parties that the Authority considered there to be indications that a wait for a final decision could cause serious and irreversible harm to competition. The companies concerned were given an opportunity to comment on the Competition Authority's preliminary assessment, as well as on Tals's submission.
Provision 3 of Article 16 of the Competition Act states that the Competition Authority is authorised to make interim decisions in individual cases if:
…it is likely that the conduct or circumstances under consideration contravene the provisions of competition law or decisions taken on the basis thereof …
It is also a condition that the matter cannot be delayed.
Decision No. 1/2009.
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