The Competition Authority concluded in a decision in July 2011 that Forlagið ehf. had breached the conditions of the authority's decision. No. 8/2008. The publishing house was established in 2008 through the merger of two companies, namely JPV útgáfu ehf. and Vegamóta ehf. During the merger proceedings at the Competition Authority, the Publisher took the initiative to propose conditions that would remove the barriers to competition which the Authority had identified. A settlement was reached in the case, whereby the Publisher committed to complying with certain conditions to counteract the merger's adverse effects.
By decision No. 24/2011 The Competition Authority concluded that the Publisher had breached these conditions. The infringements consisted of the Publisher breaching the prohibition on publishing recommended retail prices for retailers (Article 14) and the prohibition on granting bookshops discounts that constituted undue discrimination between them (Article 15). These conditions were intended, among other things, to ensure that the Publisher would not distort competition in the resale of books. The Competition Authority imposed a statutory fine of 25,000,000 kr. on the Publisher for these breaches.
The publisher appealed the decision of the Competition Authority to the Competition Appeals Board. In September 2011, the Appeals Board confirmed that the Publisher had committed the aforementioned infringements and that the imposed fine was appropriate. The Publisher appealed the Appeals Board's ruling to the courts and in October 2014, the court upheld District Court of Reykjavík ruling of the appeals board.
The publisher appealed the district court's judgment to Supreme Court which today delivered its judgment. The Supreme Court confirmed that the Publisher had breached the prohibition on publishing recommended retail prices to retailers (Article 14). However, the majority of the Supreme Court (3 judges) held that the Publisher had not breached the prohibition relating to its discount (Article 15).
In view of the foregoing, the fines were reduced from 25,000,000 to 20,000,000 kr. This is stated in the judgement: „When assessing the amount of the fine, it will be taken into account that the appellant intentionally breached a condition which he himself had initiated. That provision prohibited him from having any involvement in resellers“ sale prices or from publishing in any way the retail prices of books he published, the intention being to prevent competition over the books' retail prices from being hampered. The provision of Article 15, on the other hand, concerned a ban on granting discounts to resellers unless an irrefutable cost-based justification could be provided. By its nature, a breach of Article 14 of the decision will be considered more serious than a breach of its Article 15. Accordingly, the appellant's fine is set at 20,000,000 krónur."
Two judges dissented. They considered that the decision of the district court on the Publisher's infringement of Article 15 of the decision should also be upheld. No. 8/2008 and a fine of 25,000,000 kr.
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