Serious breaches of competition law by Byko

By decision of the Competition Authority No. 11/2015, published today, concludes that Byko breached competition law and the EEA Agreement through extensive illegal collusion with the former Húsasmiðjan during the period covered by the investigation, i.e. up to March 2011 when the investigation began. That infringement by Byko included, amongst other things:

• Regular, usually weekly, communication with the old Húsasmiðjan regarding prices, stock levels, etc., with the aim of increasing prices or counteracting price reductions on so-called bulk goods (bulk goods include, for example, timber, rock wool and steel).
• Collusion with the old Húsasmiðjan to increase prices on all offers for bulk goods in stages.
• A conspiracy with the old Húsasmiðjan to work against price competition in the sale of treated timber (decking material) during the product's peak selling season and instead attempt to raise prices.
• Consultation with the old Húsasmiðjan about raising the price of central heating thermostats.
• Having made a joint attempt with the former Húsasmiðjan to get Múrbúðin to participate in a consultation on the price of building materials, and having decided, together with Byko, to monitor Múrbúðin's activities in the market.

A more detailed description of Byko's offences can be found in summary of findings of the decision.

The Competition Authority considers that Byko's breaches are very serious and were committed intentionally. They were liable to cause significant damage to house builders and the general public. The Competition Authority's decision further states that the appropriate fine for this is 650 million króna. To help ensure that such offences are not committed within the group to which Byko belongs, the fine is imposed on Byko's parent company, Norvík.

In its decision, the Competition Authority also concludes that Steinull has breached the conditions in the competition council's decision. No. 19/2002, including by providing Húsasmiðjan with information on Múrbúðin's commercial terms. The conditions in question were imposed in connection with the acquisition by Byko, Húsasmiðjan and Kaupfélag Skagfirðinga of shares in Steinullarverksmiðjan hf. (now Steinull hf.). The conditions were intended to prevent the joint ownership of Steinull by Byko and Húsasmiðjan from restricting competition. The Competition Authority considers it appropriate to impose a 20 million króna administrative fine on Steinull for this.

The offences in this case are not related to the current operators of Húsasmiðjan. The investigation into Húsasmiðjan's involvement in the case concluded in July last year. By settlement, dated On 9 July 2014, the former operator of Húsasmiðjan, Holtavegur 10 ehf., admitted that the old Húsasmiðjan had engaged in illegal collusion with Byko in the manner described in the decision of the Competition Authority issued today. It was also acknowledged that the former Húsasmiðjan had breached the aforementioned decision of the Competition Council. No. 19/2002, including by exerting pressure on Steinull to prevent Múrbúðin from receiving certain commercial terms. An administrative fine was also paid for the infringements. The current operator of Húsasmiðjan entered into a settlement with the Competition Authority on the same day, in which Húsasmiðjan undertook to take measures to ensure that the infringements in question would not be repeated.

On 9 April 2015, a verdict was delivered at the Reykjanes District Court in a criminal case brought by the Office of the Special Prosecutor against employees of Byko and Húsasmiðjan. That verdict has now been appealed to the Supreme Court. That criminal case does not affect the decision of the Competition Authority.

Questions related to this, etc., are answered. here. On the Competition Authority's website, you can find a special information page Regarding the case. There you can access the decision, news published by the Competition Authority regarding the case, and answers to questions about the matter.