The state broadcaster has reported today and yesterday on an administrative appeal by Inter, an association of internet service providers, which is understood to have been submitted to the Competition Appeals Board, regarding the alleged delay by the Competition Authority in handling complaints submitted by the association in 2004 and 2005. In this regard, the Competition Authority wishes to make the following statement.
The handling of the case to which Inter refers began in the autumn of 2007, based on information received by the Competition Authority in June 2007 and a complaint from the company TSC from the same year. Furthermore, the investigation is based on matters of complaint that had been received by the Competition Authority from IP Fjarskiptum and Inter in 2004 and 2005. Inter's submissions concerned various matters, including incidents not covered by this investigation, but in 2007 the Competition Authority had asked Inter to take a position on which of the complaints was most urgent to resolve.
The aforementioned investigation concerned, in particular, the possible abuse by Síminn of its dominant market position through restrictive pricing, the bundling of services, the conclusion of exclusive purchase agreements, and discrimination in the form of discounts for ADSL connections for businesses. The investigation also covered whether Síminn had contravened previous decisions by the competition authorities.
An objection letter containing the Competition Authority's preliminary assessment was sent to Síminn at the end of 2008, and responses to it were received in the first half of 2009. Due to new information and perspectives that emerged during this process, it became necessary to revise the Competition Authority's initial assessment. Due to a heavy workload, it has been necessary to prioritise cases and, in light of this, the Competition Authority decided to conclude part of the case in a separate proceeding, pursuant to the decision No. 41/2009, Simens's breach of the Competition Council's decision No. 10/2005. The decision addressed a complaint from the aforementioned company, TSC. The company was fined 150 million krónur in connection with the case. That case was heard by an appeals board which upheld the finding of an offence by Síminn but reduced the fines to 50 m.kr. The case is now before the courts.
Inter have been regularly kept informed of the status of the aforementioned case and the delays that have occurred in its handling. The Competition Authority has been forced to prioritise its workload, as the volume of work has increased significantly in recent years. This is the main reason for the delays in handling the case.
Regarding the comments by the representative of Inter that the Competition Authority has not fulfilled its duties to protect competition interests in the telecommunications market, it should be noted that the competition authorities have spent a great deal of time in recent years investigating the telecommunications market. Last year, the Authority devoted almost 20% of its disposal time to projects in the telecommunications market. A number of investigations concerning the telecommunications market are currently under way.
Furthermore, the Competition Authority has concluded a number of cases in recent years concerning important competition interests in the telecommunications market. The main cases are as follows:
- Decision No. 6/2007, Illegal collusion of Landsvirkjun, Fjarska ehf. and Síminn hf. regarding business related to Fjarska ehf.
Síminn, Landsvirkjun and Fjarski, a subsidiary of Landsvirkjun, entered into a settlement in which they admitted to having consulted with each other regarding Síminn's acquisition of a stake in Fjarski and Síminn's purchase of six fibre-optic cables between the Hrauneyjarfoss power station and Akureyri. The companies agreed to pay a total of 80 million króna in a government fine.
- Decision No. 17/2007, Case and proceedings of Erindi and Fjarskipta hf. concerning the alleged abuse of a dominant position by Landssími Íslands hf. in the mobile phone market.
The Competition Authority concluded that Síminn hf. had abused its dominant market position by subsidising GSM mobile phones that were locked to its own mobile network. These measures were intended to maintain or strengthen Síminn's dominant market position in an undue manner, thereby breaching Article 11 of the Competition Act. The decision was not appealed.
- Decision No. 36/2008, Merger of Teymir hf. and IP-fjarskipta ehf.
The Competition Authority set conditions to ensure competition between Vodafone and IP telephony (Tal).
- Report No. 2/2008, Robust development, market opening and the promotion of business activity. Various recommendations were put forward to strengthen competition in, for example, the telecommunications markets and to make it easier for new entrants to enter the market.
- Provisional decision No. 1/2009, Alleged breach by Teymir hf., Fjarskiptin ehf. and IP-Fjarskiptin ehf. of a decision of the competition authority No. 36/2008 and provisions of competition law.
The Competition Authority concluded that Teymi, Vodafone and Tal had probably breached its decision. No. 36/2008 and Article 10 of the Competition Act by an agreement that Tal would not compete with Vodafone. It was also considered likely that representatives of Teymi had acted against Tal's competitive independence, and it was therefore deemed necessary to make changes to Tal's board and appoint independent members.
- Decision No. 4/2009, Daily fines for Team Ltd.'s breaches of the Competition Authority's interim decision No. 1/2009.
The Competition Authority considered it likely that Teymi had breached the aforementioned interim decision. No. 1/2009 and decided to impose a daily fine. Team Sky was to pay 3 million kronor per day until the interim decision had been
enforced.
- Decision No. 8/2009, Measures to ensure the competitive independence of IP-fjarskiptar ehf.
The Competition Authority decided that the Team's representatives should step down from the board of Tal and that the Competition Authority would appoint independent representatives in their place on the board of Tal.
- Decision No. 27/2009, Breach of the decision of the competition authority No. 36/2008 The merger of Teymir hf. and IP-fjarskipta ehf. and Article 10 of the Competition Act.
The Competition Authority concluded that Teymi and Vodafone had breached its decision. No. 36/2008 and in breach of Article 10 of the Competition Act through concerted action. Teymi was ordered to divest its shareholding in Tali and to pay a statutory fine of 70 million krónur.
- Provisional decision No. 2/2009, Alleged infringement by Símen hf. with an offer for a 3G network key and subscription.
The Competition Authority banned the offer from Síminn hf.
- Decision No. 41/2009, Violation by Síman hf. of a decision of the Competition Council No. 10/2005 Merger of Landssími Íslands hf. and Íslenska sjónvarpsfélagsins hf.
The Competition Authority concluded that Síminn hf. had breached the conditions of a previous decision, thereby seriously distorting competition from a smaller competitor. The Competition Authority imposed a 150 million króna administrative fine on Síminn. The Competition Appeals Board upheld the finding of an infringement but reduced the fine to 50 million króna. The case is now before the District Court.
- Decision No. 43/2009, Complaint regarding the sale and handling of IP Fjarskiptar ehf.
The case concerned a complaint that Teymi had rejected a bid in Tal, thereby breaching a decision of the competition authority. No. 27/2009. The Competition Authority did not challenge Team's statement that the company did not have information on the value of Talk and therefore could not accept the received offer. It was therefore considered that there was no reason to take further action in the matter.
- Provisional decision No. 2/2010, Alleged infringement by Símen hf. of the market for mobile phone services.
The Competition Authority concluded that Síminn hf. had carried out extensive illegal measures aimed at acquiring valuable customers from Nova. This interim decision was taken following a search in April 2010.
- Decision No. 7/2010, Merger of Vestia ehf. and Teymi hf.
Conditions were set for the merger, inter alia for the purpose of protecting competition in the telecommunications market.
- Settlement with Skipti, Síminn and Technology Products.
The Competition Authority conducted a raid at The exchange operator in April 2010. Based on the data found during that search, a search was carried out at Hátækni ehf. and its parent company, Olíuverslun Íslands hf., on 7 May this year. This was done due to 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. This led to the Competition Authority admitting in July 2010 that Tæknivörur had engaged in illegal collusion with Hátækni and agreeing to pay a 400 million króna fine. The Authority also ordered Tæknivörur to divest itself of Hátækni.
- Decision No. 1/2011, Acquisition of Eignarhaldsfélagið Vestia ehf. by Kaup Framtakssjóðs Íslands Ltd.
Through this merger, the Framtakssjóðurinn, a holding company for pension funds, gained control of, among others, Vodafone. Conditions were imposed on the merger, including to protect competition in the telecommunications market.
