The Competition Authority has today imposed daily fines of three million krónur on Teymi hf. because the company has failed to comply with the Competition Authority's instructions to make changes to the board of IP-farskipti (Tal). as stipulated in the provisional decision of 26 January last.
In its interim decision, the Competition Authority stipulated that the Team's representatives on the board of Tal should step down from the board no later than 30 January. They were to be replaced by two independent individuals, nominated by the Competition Authority.
In its interim decision, the Competition Authority considered it likely that representatives of Teymi had acted against Tal's competitive independence and therefore it was necessary to make changes to Tal's board of directors. Otherwise, there was a risk that Teymi and Vodafone could permanently weaken Tal as a competitor in the market. By their conduct, Teymi, Vodafone and Tal had breached the authority's decision on the merger of Teymi and Tal from last year, and the provisions of the Competition Act.
The Competition Authority considers that Teymi has disregarded the aforementioned instructions. It is established that Teymi's representatives on the board of Tal are still directors of the company, and it also follows that the individuals nominated by the Competition Authority have not been appointed to the board of Tal. It is clear that the management of Teymi has the power to ensure compliance with the instructions of the Competition Authority, but the company has not done so. The Competition Authority therefore considers that Teymi has breached the aforementioned interim decision. No. 1/2009.
In order to enforce compliance with the above instructions, the Competition Authority has decided to impose daily fines due to Team's failure to comply. The Team shall pay three million krónur per day until the interim decision has been enforced to have the Team's current representatives on the board of Tál step down and for new independent individuals to be appointed in their place.
Background information
The Competition Authority conducted searches at the premises of Teymir, Vodafone and Tal on 7 January. The Competition Authority had obtained a search warrant in accordance with the law, and data was seized from the companies in question. As the Competition Authority considered that waiting for the Authority's final decision could cause serious and irreversible damage to competition, an interim decision was taken on 26 January. No. 1/2009 regarding the matter. It concludes that Teymi, Vodafone and Tal have probably breached the decision of the Competition Authority. No. 36/2008 and Article 10 of the Competition Act by consulting on the fact that Tal should not compete with Vodafone. The Competition Authority then 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 Teym, 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 therefore ruled that the Team representatives on the board of Tal should step down and that two independent individuals, nominated by the Competition Authority, should be appointed in their place. Certain provisions in the agreement between Tal and Vodafone concerning Tal's access to Vodafone's mobile network were also declared invalid on the grounds that they were contrary to the decision of the Competition Authority. No. 36/2008 The merger of Teymir hf. and IP-fjarskipta ehf. and the provisions of Article 10 of the Competition Act.
See the decision for details No. 4/2009.
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