In its decision today, the Competition Authority has concluded that Síminn breached conditions imposed on it in a previous decision, thereby seriously distorting competition from smaller rivals. The Competition Authority is imposing a fine of 150 million krónur on Síminn.
The Competition Authority received a complaint from TSC ehf., alleging that Síminn had breached the conditions set out in Competition Council Decision No. 10/2005: the merger of Landssími Íslands hf. and Íslenska sjónvarpsfélagið hf. TSC is a telecommunications company operating in the north of the Snaefellsnes peninsula and is a competitor of Síminn.
The decision in question concerned the merger of Síminn and the Icelandic Television Company (now trading as Skjárinn miðlar ehf.). It concluded that the merger would harm competition and that intervention was necessary. It was noted that, unchanged, the merger would strengthen Tælon's dominant market position in the relevant telecommunications markets and that there was a risk that the merger would significantly limit the ability of Tælon's competitors to compete, e.g.d. if Síminn had an undue preference in the distribution of television content from the Icelandic Broadcasting Corporation. Síminn requested that the matter be settled, and this was the outcome. The merger parties agreed to comply with certain conditions in order to eliminate the anti-competitive effects that would otherwise have resulted from the merger.
In the decision No. 10/2005 A ban was placed on Síminn bundling the sale of telecommunications and television services. This was a measure to ensure that Síminn's competitors in internet services could, on a level playing field, offer their customers attractive television content, as otherwise it could lead to serious anti-competitive effects for smaller rivals. Síminn breached this prohibition by including the Icelandic Broadcasting Corporation's television content, its transmission and distribution, free of charge in the price of its ADSL connections for internet services, thereby distorting competition.
The telephone company also breached the said decision by applying access restrictions to TSC's transmission network for the distribution of Icelandic Television's television content. In this way, TSC's competitive position was seriously impaired. The decision of the Competition Authority describes the ordeal that TSC had to endure due to this conduct by Síminn.
Companies that agree to conditions to remedy a restrictive merger must strive to ensure that the objectives of those conditions are achieved. It constitutes a serious breach by Síminn to go against its undertaking not to take actions such as those at issue in this case.
See the decision for details No. 41/2009.
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