The Competition Appeal Tribunal directs the Competition Authority to investigate further the possible abuse of a dominant position by Microsoft.

The Appeals Board has today instructed the Competition Authority to investigate in more detail the pricing of raw milk by MS, on the one hand to related companies and on the other hand to competitors of the MS group. In the opinion of the Appeal Board, this is necessary as MS, during the proceedings before the Competition Authority, failed to inform the Competition Authority about an agreement with Kaupfélag Skagfirðinga, which the company then based its arguments on before the Appeal Board. In the opinion of the Appeal Board, MS also failed to provide satisfactory explanations regarding the implementation of the agreement during the hearing before the Board.

The background to the case is that at the end of last September, the Competition Authority concluded that Mjólkursamsalan ehf. (MS) had breached the prohibition in Article 11 of the Competition Act against the abuse of a dominant position. The case arose when Mjólkurbúið Kú ehf. (the Dairy) complained that it had to pay MS a higher price for unprocessed milk for processing, i.e. raw milk, than competitors of the Dairy affiliated with MS had to pay.

The Competition Authority found in its decision that MS had unlawfully discriminated against Mjólkurbúið and, previously, Mjólka while it was owned by its former owners, by selling the companies unpasteurised raw milk at a price up to 171% higher than that applied to related parties, i.e. KS and later Mjólka when it had been sold to KS. This discrimination in raw milk prices was intended to weaken Mjólka as a competitor of MS and its affiliated companies. After Mjólka came under the ownership of KS, the company received raw milk from MS at a completely different and lower price than before, when it was a competitor of MS and KS in the dairy products market. The Competition Authority concluded that MS had seriously breached Article 11 of the Competition Act and imposed a fine of 370 million króna on the company.

Before the Appeal Board, MS for the first time submitted a specific piece of evidence, a contract with Kaupfélag Skagfirðinga from 15 July 2008. During the investigation of the case, MS had never referred to or disclosed this agreement to the Competition Authority, despite the Competition Authority having repeatedly requested explanations and evidence from MS regarding the said pricing. The appeal board's ruling states the following about this:

„Although the appellant has not provided a satisfactory explanation as to why neither the contract nor the fundamental evidence concerning its performance and settlement was submitted to the Appeal Board, the Board considers it its duty, on the basis of the principle of investigation in administrative law...to place the matter in a position where these issues are clarified. The matter was not further clarified in this respect during the oral hearing. In these circumstances, the Appeal Board is of the opinion that it is unable to take a substantive position on the matter. It is therefore unavoidable to annul the contested decision of the Competition Authority and to remit the case to the Authority to take a new position thereon, following further investigation and having regard to the views concerning the significance of the agreement between the appellant and KS of 15. July 2008, the settlement between the parties and the performance thereof during the period when the alleged infringement was taking place.“

The Competition Authority will, in accordance with the appeal board's ruling, take the matter back for reconsideration. Furthermore, the Competition Authority will investigate the reasons why the said agreement was not submitted to the Authority during the investigation of the case, as concealing information from the Authority during an investigation may be subject to penalties.