By decision No. 11/2011 The Competition Authority came to the conclusion that conclusionthat 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 confirmThe 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 this case included the sale of soft drinks. Vífilfell, however, argued that the market is broader and includes all non-alcoholic drinks, such as milk-based drinks, coffee, fruit juices, energy drinks, soft drinks, etc.
Í judgement In November 2013, the Reykjavík 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 fizzy drinks. Therefore, in the court's opinion, 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 has based its position on the fact that a sufficient investigation formed the basis of the aforementioned market definition, as the authority had obtained data from the main market players, assessed that data and taken a position on the various viewpoints. In particular, the Competition Authority has supported its conclusion with domestic and international precedents and referred to data from the market participants themselves in support of its conclusion.
The case was appealed to the Supreme Court, which today delivered its judgment. judgment. The Supreme Court agrees with the assessment that the potential for contamination of soft and water drinks was not investigated adequately and upheld the district court's judgment.
The Competition Authority will review the grounds of the Supreme Court of Iceland's judgment. It is important for the development of competition in the drinks market that it is determined whether the practices in dispute in this case comply with competition law. As a substantive ruling was not obtained in the case, it is for the Competition Authority to decide how to respond. A new investigation into Vífilfell's actions may be considered.
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