In March 2011, the Competition Authority came to the conclusion that conclusion that Vífilfell Ltd. had breached the prohibition provisions of the Competition Act by abusing its dominant position in the soft drinks market. These were nearly 900 contracts between Vífilfell and its customers (restaurants and shops) which included provisions for exclusive purchasing, conditional discounts and other security provisions. The Competition Authority considered that the company was thereby excluding competition. Vífilfell appealed the Competition Authority's decision to the Competition Appeals Board. In its ruling from October 2011 confirm The appeals board upheld the Competition Authority's finding that Vífilfell had committed an infringement of competition law, but reduced the fine imposed on the company. Vífilfell appealed the appeals board's ruling to the courts.
When assessing whether a company is a dominant undertaking under competition law, the relevant market must be defined. The Competition Authority and the Appeal Board considered that the market in question included the sale of soft drinks. This is consistent with previous cases in this country and with precedent in neighbouring countries. Vífilfell argues that the market is broader and includes all soft drinks, such as milk drinks, coffee, fruit juices, energy drinks, etc. The District Court did not agree with Vífilfell that the market was so broad in this respect. However, the court considered that it had not been sufficiently investigated whether sparkling water drinks were in the same market as soft drinks. Therefore, in the court's view, it was not clear that Vífilfell was a dominant undertaking. For this reason, the court annulled the decision of the Competition Appeals Board.
The Competition Authority will review the grounds of the Reykjavík District Court's judgment and decide whether to appeal it to the Supreme Court of Iceland.
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