The Competition Authority has, in its decision today, concluded that Vélar og verkfæri ehf. abused its dominant market position in the sale of material for the production of master key systems. The company did this by preventing service providers of master key systems from importing and selling master key systems from manufacturers other than ASSA in Sweden, and by working against other foreign manufacturers gaining a foothold in the Icelandic market. The company's infringement is serious and affects the sale of off-the-shelf master key systems directly to consumers. Master key systems consist of different locks and keys for a specific property, where one master key is, however, present that works on all the locks.
Machines and Tools sells, among other things, master key systems and materials for producing such systems from ASSA in Sweden, and holds a monopoly in this country on the sale of materials for producing master key systems. Service providers have entered into licence agreements with Vélar og verkfæri, granting them the right to manufacture, sell and service master key systems. Provisions in the licence agreements prohibited the service providers from selling master key systems from manufacturers other than ASSA, and these provisions therefore worked against their ability to begin importing in competition with Vélar og verkfæri and further worked against the ability of other foreign manufacturers to obtain master keys.key systems to gain a foothold in the Icelandic market. These provisions therefore constitute an abuse of Vél og Verkfæri's dominant market position.
The Competition Authority considers that the infringement by Véla og verkfæra was serious and created a significant barrier to entry. Therefore, in the opinion of the Competition Authority, it was necessary to impose an administrative fine on the company in the amount of kr. 15 million. In determining the amount of the fine, the severity of the infringements was taken into account, and the fines were therefore considered substantial in relation to the turnover in the relevant market.
The fragmentation of machinery and tools is an example of a barrier to competition that makes it difficult for new and smaller companies to enter the market and/or to grow and prosper alongside larger competitors. In the view of the Competition Authority, it is particularly important in economic downturns, such as the current one, to counteract barriers to entry of this kind. In a report by the Competition Authority No. 2/2008, Robust development – market opening and strengthening of economic activity, discusses in detail access barriers and resources that can accelerate economic recovery.
See the decision for details No. 14/2009.
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