The Association of Icelandic Wholesalers (FÍS) has acknowledged that discussions have taken place within the association regarding the pricing of its member companies' products in the food sector. The discussions took place both at the board level of the association and within the FÍS food retail group, and they went further than competition law permits. Similarly, the association's former director discussed members' need for price increases in a public forum, which was likely to distort competition. Furthermore, there were communications with the Confederation of Trade and Service regarding the two associations speaking with one voice on the reasons for the aforementioned price increases. FÍS has acknowledged that it breached competition law in this respect. However, FÍS states that there was no intention to hinder competition.
The investigation was initiated following a news report on the Icelandic National Broadcasting Service on 29 March 2008, under the headline „Food prices to rise by 30%“. The report quoted, among others, the then-director of FÍS as saying that it was clear there was a definite need for an increase and that he would not be surprised if food prices were to rise by 20-30% in the very near future. In light of the information in the news report, the Competition Authority decided to launch an investigation into discussions within FÍS regarding food price increases. In August 2008, the Competition Authority sent FÍS an objection notice, which set out the preliminary findings of the investigation and gave the association an opportunity to comment on them. FÍS submitted its views and subsequently requested that the matter be settled. A settlement was reached on the outcome of the case, and the Competition Authority's decision is based on it. The settlement entails that FÍS acknowledges having breached Article 12, in relation to Article 10 of the Competition Act, and agrees to pay a one million króna administrative fine.
FÍS is an association of companies and Article 12 of the Competition Act prohibits such associations of companies from engaging in any anti-competitive co-operation. The prohibition in Article 10 of the Competition Act on anti-competitive collusion means that companies decide independently how they behave in the market and how they price their products and services. Business associations may in no way undermine the independence of their members. A particularly heavy duty rests on business associations to ensure that cooperation within them does not restrict competition and thereby cause harm to consumers.
In assessing the amount of the fines, it is taken into account, among other things, that FÍS initiated settlement negotiations of its own accord and has admitted an infringement of competition law. Through these actions, FÍS has facilitated and shortened the investigation and proceedings of the competition authorities, which has a positive competitive effect. Furthermore, it is noted that FÍS has informed in this matter that the association has established general rules of procedure which will henceforth apply to all its activities and all its dealings with its members, as well as all dealings between its members on the association's platform. This should prevent similar breaches of competition law from occurring again within the FÍS's ranks. The association has also agreed to comply with orders designed to promote competition.
See the decision for details No. 5/2009.
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