The Competition Authority has reached the conclusion in a decision
No. 34/2012 which is published today that SORPA bs. (a joint venture of municipalities in the capital region) has breached competition law by abusing its dominant market position in the market for waste sorting and handling. SORPA did this by granting its owners, i.e. the municipalities in the capital region, higher discounts than other customers, such as waste collection companies, even when the companies brought more waste to SORPA's reception centre in Gufunes than the municipalities did. The Competition Authority is of the opinion that these differential discounts by SORPA have had a detrimental effect on competition, which was manifested, amongst other things, in the City of Hafnarfjörður's tender for waste collection in 2009 and also in the agreement SORPA entered into with the Southlands Waste Treatment Plant. In that agreement, SORPA granted the waste facility significantly higher discounts than those offered to private waste collection companies and other customers under its general tariff. SORPA's discounts therefore do not take into account the cost savings that arise from the increased business required when dealing with a dominant undertaking.
In the case, SORPA has justified increased discounts for municipalities in the capital region on the basis that these were dividend payments to its owners. In support of this, SORPA has referred, among other things, to the provisions of the laws under which it operates, namely the Act on Waste Management and the Local Government Act. The Competition Authority does not accept SORPA's argument, as there is nothing in these laws that authorises dividend payments in the form in question. In the opinion of the Competition Authority, SORPA is a company engaged in economic activity within the meaning of competition law and competes in many areas with private companies, such as waste collection companies. It follows that SORPA must ensure that the municipality's conduct does not have a detrimental effect in the areas where it competes with other companies.
Taking into account the nature and extent of SORPA's infringement, the Competition Authority considers that a fine of 45 million króna is appropriate. During the proceedings, SORPA has not taken any measures to equalise customer terms in order to correct the difference in discount rates for customers, which is discussed in more detail in the decision. Pursuant to its powers under competition law, the Competition Authority also directs SORPA, among other things, to revise its tariff for its services. The customer terms in the new tariff schedule shall be general, transparent and objective, so that parties engaged in similar transactions with SORPU enjoy the same terms.
In November 2010, the competition authorities in the Nordic countries published the report
Competition Policy and Green Growth. The report emphasised that active competition could contribute to environmental policy achieving better results in the markets. Thus, active competition would increase the likelihood that environmental policies would achieve their intended results, while ensuring that consumers benefited from active competition. In the view of the Competition Authority, the actions of SORPU in this case suggest that the consortium did not operate in accordance with this.
