In April 2009, the Competition Authority reached the conclusion in a decision No. 14/2009 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, among other things, by preventing service providers of master key systems from importing and selling such systems from manufacturers other than ASSA in Sweden. The company's infringement was considered serious and affected the sale of ready-made master key systems directly to consumers. Master key systems are access control systems for properties, consisting 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 position in this country for the sale of materials for producing key systems of this kind. Service providers have entered into licence agreements with Vélar og verkfæri, granting them the right to manufacture, sell and service the systems. The terms of the licence agreements prohibited the service providers from selling master key systems from any manufacturer other than ASSA. The provisions therefore worked against their ability to start importing in competition with Vélar og verkfæri and further worked against the ability of other foreign manufacturers of master key systems to gain a foothold in the Icelandic market. These provisions were considered to constitute an abuse of Vélum og verkfærum's dominant market position. The Competition Authority imposed a fine of 15 million krónur on Vélum og verkfærum, a significant sum given the turnover in the relevant market.
Machines and Tools appealed the decision of the Competition Authority to the Competition Appeals Board, which in July 2009 upheld that conclusion by ruling. No. 9/2009 that Machinery and Tools was a dominant undertaking and that the company had abused its dominant market position and thereby infringed Article 11 of the Competition Act with the said actions. The Appeal Board considered it appropriate for the company to pay a government fine of 10 million króna. Following this, Vélar og verkfæri appealed the appeal board's decision to the courts, demanding that it be annulled, inter alia, on the grounds that the company did not consider itself to be dominant and had not breached the competition law.
By today's judgment of the Reykjavík District Court, the above-mentioned decision of the Competition Appeals Board is confirmed.
See more District Court judgment.
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