Skipti, Tæknivörur and Síminn assist the Competition Authority with an investigation into illegal collusion.

400 million kr paid in fines
-Skipti sell technology products

On 21 April 2010, the Competition Authority carried out a search at Skiptum hf. and its subsidiaries, Símanum hf. and Tæknivörum ehf. Based on evidence found during that search, a search was carried out on 7 May at Hátækni ehf. and its parent company, Olíuverslun Íslands hf. This was done on suspicion of illegal collusion between Hátækni and Tæknivörur in the wholesale market for the sale of mobile phones. These companies are the main competitors in the import and wholesale of mobile phones and related equipment. Hátækni is the agent for, among others, Nokia phones, and Tæknivörur for, among others, Sony Ericsson phones.

Following the searches, Trade and Technology turned to the Competition Authority and, citing competition law, requested assistance in clarifying the matter. On that basis, the Competition Authority has exercised its powers under competition law and entered into a settlement with the Trade Group. The settlement includes the following:

• Exchanges and subsidiaries have handed over data and provided information on the course of the case.
• It is acknowledged that Tæknivörur has breached Article 10 of the Competition Act through extensive illegal collusion with Hátækni.
• Agrees to pay a government fine of 400 million kr. for the offences.
• Skipti agrees to sell its entire shareholding in Technology Products.
• The company commits to not taking any action that could distort competition in the mobile phone market.

The above settlement facilitates the investigation by the Competition Authority and, furthermore, brings about a change in the market much sooner than otherwise would have been the case, with positive effects for competition and consumers. The conditions of Article 42 of the Competition Act are met, and the Competition Authority will therefore not report the managers of the Skipta Group to the police. This concludes the matter for companies within the Skipta Group.

The role of High-Tech and, where applicable, the Icelandic Oil Trading Company is still under investigation.

Background information:
Under the provisions of the Competition Act, the Competition Authority may conclude cases by settlement and waive or reduce fines for companies that, on their own initiative, come forward and provide information about or admit participation in an illegal cartel. The Competition Act also provides that the Competition Authority may refrain from reporting company executives to the police if they or the company they work for provide assistance of this kind, but illegal collusion can, in addition to administrative fines on the company, result in individuals facing up to 6 years' imprisonment.

These provisions of competition law are not intended to benefit infringers, but are an important tool for rooting out illegal collusion and sowing discord and mistrust among those who take part in such infringements. Illegal collusion is very harmful to consumers and business, and rules of this kind have proven effective in the competition law of various countries.¹.

The above-mentioned searches at the Exchange Group were also part of an investigation into alleged breaches, including by Síminn, of the prohibition in Article 11 of the Competition Act against the abuse of a dominant position. That case is still under investigation by the Competition Authority, see the Competition Authority's Interim Decision No. 2/2010 on the alleged infringement by Síminn hf. of the prohibition in Article 11 of the Competition Act against the abuse of a dominant position.

¹A more detailed discussion of these matters can be found in report of the Prime Minister's Committee on Sanctions for Economic Offences and in a bill which became law No. 52/2007 which amended the penalty provisions of the competition law.