The Competition Authority came to the conclusion in a decision No. 24/2011 from July last year that Forlagið ehf. had breached the conditions of the Competition Authority's decision No. 8/2008. The publishing house was established in 2008 through the merger of two companies, namely JPV útgáfu ehf. and Vegamóta ehf. During the merger proceedings at the Competition Authority, the Publisher took the initiative to propose conditions that would remove the barriers to competition which the Authority had identified. A settlement was reached in the case, whereby the Publisher committed to complying with certain conditions to counteract the merger's adverse effects..
In July last year, the Competition Authority concluded that the Publisher had breached these conditions. The breaches consisted of the Publisher violating the ban on publishing book retail prices and the ban on granting bookshops discounts that involved undue discrimination by the Publisher between them. These conditions were intended, among other things, to ensure that the activities of the powerful new publisher would not distort competition in the resale of books. The Competition Authority imposed a regulatory fine of 25 million krónur on the Publisher for these breaches.
The publisher appealed the Competition Authority's decision to the Competition Appeals Tribunal, demanding that it be overturned. The Publisher based its argument, among other things, on the fact that the Competition Authority had breached administrative law in its proceedings and, in particular, had acted unconstitutionally. The Publisher also argued that the grounds for the settlement in question had changed, as its position was now weaker than it had been at the outset. Furthermore, the imposed fines were excessive, as the alleged infringements had been committed negligently.
The Appeals Board has now reached a decision in the case, confirming that the Publisher committed the alleged violations and that the imposed fine was appropriate. The Committee points out that it is essential that the Publisher complies with the conditions imposed for the merger and that agreements in such matters are more than just empty words. This is particularly true in this case, as the Publisher itself participated in the formulation of the conditions. The words and actions of the Publisher suggest that the company did not take the aforementioned conditions seriously. The Committee states that in cases of this nature, imposed fines must have a deterrent effect and ensure that companies comply with the conditions they have pledged to respect.
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