The competition authorities have been investigating a complaint by Nova regarding Símans' pricing in the mobile phone market. In April, the The Competition Authority concluded that Síminn abused its dominant market position by applying competitively restrictive price pressure to its competitors. As a result, a fine of 390 million krónur was imposed on Síminn. The Competition Appeals Board has, with ruling which is published today, confirms this conclusion of the Competition Authority.
Price pressure essentially consists of a dominant firm controlling the margin between the wholesale and retail levels, amongst other things in order to make it more difficult for new competitors to gain a foothold in the retail market. In such a case, the company concerned is dominant at the wholesale level and also operates in a related retail market. The company sells an essential product/service (which in this case is call termination in Síminn's mobile network) wholesale to other companies that use it in their operations in the retail market. There, the companies compete with the retail arm of the dominant firm, in this case Síminn. The infringement can consist of setting an unreasonably high price for the wholesale input, which makes it unprofitable for competitors to operate in the retail market or reduces their profits, thereby preventing them from competing effectively in the retail market for the benefit of the public.
In the opinion of the Appeal Board on Competition, the breach by Síminn is serious in light of Síminn's dominant position and „how he used it to effectively make competitors and their customers pay so that he could have higher profit margins from his operations and/or maintain his market position with lower prices for his own customers,“, as stated in the panel's ruling. Due to the seriousness of Síminn's violations, the appeals panel saw no reason to grant the company's request to have the fine cancelled or reduced.
The Competition Authority, in its decision, was right to impose a 50 million króna fine on Síminn for providing incorrect and misleading information during the investigation of the case. The appeal board's ruling concurred that Síminn's information had been inaccurate and misleading. However, the Appeal Board was not convinced beyond doubt that the conduct constituted an infringement liable to sanctions, and therefore quashed the fine in question. The Appeals Board states that companies are obliged to provide the Competition Authority with correct information and that it is forbidden to mislead the competition authorities.
See more ruling of the appellate board.
"*" indicates required fields
