Supreme Court upholds 80 million króna fine on the parent company of Síldar og fisks and Matfugl

In its judgment today, the Supreme Court of Iceland upheld the decision of the Competition Authority (decision No. 36/2011) which was confirmed by the Competition Appeal Tribunal (No. 13/2011) to fine the parent company of Síldar og fisks ehf. and Matfugls ehf. for the companies' illegal vertical co-ordination with Bónus regarding retail prices and discounts on them in Bónus stores. The aim of the co-ordination was to restrict effective competition, and this was the case. The Supreme Court sees no reason to interfere with the amount of the fines.

The background to this judgment can be traced to a Competition Authority investigation into so-called pre-labelling of meat products, a practice whereby for many years meat processing companies labelled their products for retailers. In 2010, the Competition Authority reached a settlement with Haga and six meat processing companies over the matter, in which the companies in question admitted to the infringement, paid fines and undertook to cease pre-labelling meat products. Further information on the changes to price labelling on meat products that resulted from the case can be found at here

However, Síld og fiskur and Matfugl did not accept their share of the case. In 2011, the Competition Authority then ruled on the companies' infringement and fined their parent company, Langasjó ehf., 80 million krónur. The Appeal Board upheld the decision, but the Reykjavík District Court overturned the appeal board's ruling, citing that the proceedings against the parent company Langasjó had been flawed and that the Competition Authority was not permitted to impose an administrative fine on Langasjó for the subsidiaries' violations.

The Supreme Court has now overturned the district court's judgment, as described above. The Supreme Court considers that the administrative law procedural rules were not breached and that it was permissible to impose an administrative fine on the parent company. Furthermore, Langisjór and its subsidiaries are ordered to pay the Competition Authority 4 million krónur in legal costs.