On 6 March, the Competition Authority reached the conclusion that the decision of the Farmers' Association of Iceland (BÍ) No. 9/2009, had infringed competition law through actions aimed at raising the price of agricultural produce. The infringement took place in connection with the Althing, which was held in March 2008. The infringement was considered to relate to agricultural products not subject to official pricing under the Agricultural Products Act, such as chicken, eggs, vegetables and pork. As a result of this breach, BÍ was ordered to pay a government fine of 10,000,000 kr. and was required to take measures to prevent a similar breach from recurring.
BÍ did not accept this decision and appealed to the Competition Appeals Board. The association does not believe it has breached competition law and maintains that its actions do not fall under the provisions of the Competition Act. In this regard, BÍ has referred to provisions of the Agricultural Produce Act. The Competition Authority, however, has argued that competition is intended to protect the public interest with regard to those agricultural products that are not subject to public pricing. The case therefore concerned important issues regarding the interaction between the Agricultural Produce Act and the Competition Act.
In a ruling by the appeals board, published today, the Competition Authority's conclusion is upheld that competition law applied to BÍ's actions. The board states that the pricing of agricultural products not regulated under the Agricultural Produce Act is subject to „the laws of the free market and thereby the provisions of the Competition Act, as the competition authorities have repeatedly confirmed in their relevant rulings.“ The Commission also confirmed that the BÍ had breached competition law with actions aimed at raising the prices of agricultural products, and considered that this constituted an indisputable legal violation.
The Competition Appeals Board considered it appropriate to reduce BÍ's fine to seven and a half million króna. In this regard, it was noted that this was BÍ's first offence and that open discussions had long been tolerated within BÍ's forum without interference. The Appeal Board considered the Competition Authority's instructions to BÍ regarding measures to prevent a recurrence of similar infringements to be too general and annulled them. Following this ruling, the Competition Authority will contact the BÍ to ensure that clear working procedures are put in place to guarantee that illegal price-fixing does not occur again on the BÍ's platform.
See the decision of the Appeal Board for further details. No. 7/2009 on the suspension of legal effect.
See the full judgment of the Appeal Committee No. 7/2009 in the case.
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