In December, the Competition Authority fined SORPA bs. 45 million krónur for breaching competition law. According to the decision No. 34/2012 SORPA bs. (a joint venture of municipalities in the capital region) breached competition law by abusing its dominant position in the market for waste sorting and treatment. SORPA did this by granting its owners, i.e. the municipalities of the capital region, and the Southlands Waste Station Ltd. 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. Pursuant to the Competition Act, the Competition Authority instructed SORPA to revise its service tariff and its commercial agreements in accordance with the provisions of the Competition Act.
SORPA appealed the decision of the Competition Authority to the Competition Appeals Board, primarily seeking the annulment of the decision, and in the alternative, that the fine for the infringement be cancelled or significantly reduced. The company based its argument, in part, on the fact that the activities of public undertakings such as SORPA do not fall under competition law.
The Competition Appeals Tribunal has now, by its decision in the case No. 1/2013 confirmed the decision of the Competition Authority both with regard to SORPA's abuse of a dominant market position and the administrative fine for the infringement. In its ruling, the Appeals Board concludes that there is no doubt that SORPA is an undertaking within the meaning of competition law, and that provisions of special legislation do not limit the powers of the competition authorities to apply the prohibition provisions of competition law to SORPA.
The Appeals Board also confirmed, with reference to the reasoning of the decision under appeal, that SORPA had abused its dominant market position by discriminating against its customers with different discount terms in similar transactions, in the form of increased discounts to its owners and Sorpustöð Suðurlands bs. The discount was liable to distort competition in the market for waste sorting and treatment, and the increased discount to Sorpustöð Suðurlands bs. was likewise unlawful. Regarding SORPA's argument concerning the reduction of fines, the appeal board notes that SORPA's infringements are „It is clear beyond any doubt that conduct of this kind is contrary to section 11 of the Competition Act, pursuant to paragraph c of the second subsection of the section. There is therefore no basis for agreeing with the appellant that the infringements were committed negligently, which would lead to a reduction of the fines.“
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