The Competition Authority has today published an opinion No. 1/2024, The Competition Authority's investigation into the conduct of Ísteka ehf. in the blood collection market, drawing the attention of the Ministry of Food to matters of concern in activities related to blood collection from mares and making direct recommendations to the Ministry that the government can use in this area. At the same time, the attention of the company Ísteka ehf. (hereinafter Ísteka) is drawn to its strong position in the relevant markets, the obligations that accompany it under competition law, and measures that could ensure its activities comply with competition law. Finally, this opinion contains recommendations for farmers in this field.
The reason for the opinion is that the Competition Authority has received submissions and complaints from farmers who have sold mare's blood to Ísteka, alleging that the company is hindering competition with its conduct, which consists of m.a. consists of the company using its dominant position to avoid negotiating business with farmers on reasonable terms, unilaterally pricing the blood and not providing information about the measurements carried out on mares or the blood that the company buys from farmers.
Isteka's position is extremely strong, and the company has the distinction of being the sole licensee for the production of a pharmaceutical substance from mare's blood, as well as the only buyer of mare's blood in the country, and simultaneously carries out its own blood collection from its own blood mares.
It is clear that Isteka's position vis-à-vis farmers is strong. Such a unique position requires high standards of practice in all areas. It also places a duty on the company to ensure that its operations and management do not hinder competition. At the same time, it is important that the ministry bears this in mind when setting further regulations or otherwise intervening in the market.
In view of possible market failures in the relevant markets and in order to mitigate the competitive distortion that may arise from Ísteka's position, the Competition Authority considers that the following measures, among others, should be taken:
Great responsibilities rest on companies in a monopoly or dominant market position to ensure that their activities are in compliance with competition law in all respects. The above measures would be conducive to this. Furthermore, the Competition Authority directs the Ministry of Food to take a position on how the government can promote improved competitive conditions in accordance with the above. It should be borne in mind in this regard that measures of this kind can work in conjunction with other government objectives concerning responsible and healthy business practices.
With the publication of the opinion, the Competition Authority has also decided not to take further action at this stage, such as by deciding to formally intervene in the matter. Such an investigation, including an investigation into possible breaches of the prohibition on the abuse of a dominant position, would have required a more detailed investigation. This prioritisation of tasks stems in part from the limited operational resources available to the Competition Authority to carry out its tasks. The Competition Authority has publicly stated that its caseload and insufficient funding make it difficult for the authority to fulfil its statutory duties, see e.g. the Competition Authority's submission to the Budget Committee, dated. 14 November 2023.
The opinion is issued pursuant to paragraph c of the first paragraph of Article 8 of the Competition Act, which provides that the Competition Authority is to advise government authorities on ways to make competition more effective and to facilitate the entry of new operators into the market. Reference is also made to Article 3 of Regulation No 880/2005 on the procedure of the Competition Authority, which permits the Authority to issue recommendations to undertakings, their associations and public bodies with a view to promoting effective competition. Furthermore, pursuant to Article 18 of the Competition Act, the Authority shall draw the Minister's attention to this in its opinion if it considers that any provision of legislation or government regulations contravenes the objectives of the Competition Act or impedes free competition.
It should be emphasised that this opinion deals exclusively with competition issues concerning the taking of blood from pregnant mares, as it is not within the remit of the Competition Authority to take a position on the debate regarding animal welfare, the image of horse breeding or other related matters that have been discussed in other forums. On the other hand, it can be inferred that the restraint which competition can exert on businesses is likely to strengthen the general operation of the relevant market.
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