Possible abuse of a dominant position by Já ehf. referred back to the Competition Authority – The Authority seeks the views of interested parties The Competition Appeals Board has annulled the decision of the Competition Authority No. 31/2014 regarding the abuse by Já ehf. of its dominant market position. The case was originally brought by complaints from Miðlun hf. and Loftmyndum ehf., as well as a referral from the Postal and Telecommunications Authority, concerning alleged exclusion of competition.
The Competition Authority's decision concluded that Já ehf. had abused its dominant market position in the market for the operation and wholesale access to a telephone number database. Já ehf. was, in effect, in a monopoly position. The Competition Authority also considered that access to Já ehf.'s database was essential for those wishing to offer directory enquiry services in competition with the company. Já's database has its roots in the period when telecommunications were a state monopoly in this country. The database was previously under the control of Síminn and its predecessors. The decision pointed out, among other things, that those intending to use the database in competition with Já ehf. had been made to pay a much higher price for access to it than those who posed no competitive threat to the company. The Competition Authority considered that the conduct of Já ehf. was likely to exclude competition and therefore fined the company 50 million króna for the state treasury.
In Decisions of the Competition Appeal Tribunal, which was issued yesterday, states that both Já ehf. and the company's previous owners considered the company to be in a dominant market position. When the company was purchased by new owners, it was agreed to preserve the value of the database by, at least temporarily, making it difficult for others to build a comparable one. Among other things, with reference to this, the committee confirmed the finding that Já ehf. had been in a dominant position in the market for wholesale access to a telephone number database. In this regard, the Committee noted that Já ehf. was well aware of its position and was keen to protect it. The Committee also pointed out that the database in question was both „comprehensive and unique“ and therefore indispensable for those wishing to start operating in this field.
The panel's ruling states that Já ehf. was obliged to comply with requests from new competitors for access to the database, which could pave the way for competition. The commercial terms for such access had to be fair. The panel found that information provided by Já ehf. and the company's explanations of its tariffs were, in some respects, misleading, and that there was evidence of a subjective intent on the part of the company's representatives to restrict competition. However, the competition authorities would need to prove that the company had abused its dominant market position.
Regarding the costs of operating the database, the Commission considered that such costs were in the range of 70-90 million króna per year during the period covered by the competition authorities' investigation. The Committee considered that the fee which Já ehf. had set for access to the database was in part unclear, as the tariff was dependent on the volume a prospective competitor would have required. However, no information was available in the case regarding that volume. Regardless, it was not possible to use a higher revenue figure than that assumed by the fixed maximum fee, which the board estimated to be between 22 and 33.5 million krónur per year. The panel's ruling noted that the Competition Authority had largely relied on the analysis by the Post and Telecommunications Authority of Já's costs and revenues. The Post and Telecommunications Authority had considered Já's pricing to be excessive and anti-competitive. The Appeals Board, however, considered that the analysis by the Post and Telecommunications Authority did not constitute conclusive proof that the price offered by Já ehf. was unreasonable. As the decision of the Competition Authority involved punitive sanctions, any doubt as to the matter had to be resolved in favour of Já ehf. The Competition Authority's decision to impose a fine was therefore overturned.
As previously stated, the complaints from Miðlun hf. and Loftmyndir ehf. formed the basis of the Competition Authority's decision, in addition to a submission from the Postal and Telecommunications Authority. In its ruling, the Competition Appeals Board has confirmed Já's dominant market position in the relevant market. Furthermore, the board notes that there was evidence of Já's intention to restrict competition.
In light of the above, the Competition Authority must now decide how best to respond to the aforementioned ruling. The Competition Authority will seek the views of the parties to the case, as well as those of the Post and Telecommunications Authority. The Authority also hereby gives other interested parties the opportunity to submit their views. It is requested that such views be received by the Authority no later than 10 April.
Subsequently, the Competition Authority will decide whether and how to respond to the ruling.
"*" indicates required fields
