The Competition Authority has decided to launch a formal investigation into whether Storytel Iceland ehf. and Storyside AB (collectively „Storytel“) have infringed the prohibition on the abuse of a dominant position, as provided for in Article 11 of the Competition Act no. 44/2005 and Article 54 of the EEA Agreement. of the Competition Act no. 44/2005 and Article 54 of the EEA Agreement.
Storytel Iceland ehf. operates a streaming service for audiobooks and e-books in Iceland. Storyside AB is responsible for publishing the books offered on the streaming service. The companies in question are owned by Storytel AB, which is registered in Sweden, and the Competition Authority's investigation also covers the parent company.
The case has its roots in a complaint from the Writers' Union of Iceland (RSÍ). Since the complaint was received, the Competition Authority has gathered information during its preliminary investigation, including from Storytel, which has denied being dominant in the market or having abused such a position.
The Competition Authority's investigation will first focus on whether Storytel is considered dominant, as companies in such a position have a special obligation not to take any action that could distort competition in the market.
Secondly, it is being investigated whether Storytel's terms of business towards publishers/authors are considered unfair and whether the marketing and presentation of book titles by Storytel is anti-competitive.
The complaint refers to RSÍ's belief that audiobooks published by Storyside or other imprints within the Storytel group are given preferential treatment in the presentation and selection of content on the Storytel streaming service, at the expense of material from others, thereby receiving more listens. This, on the one hand, has the effect of Storytel attempting to force authors to contract directly with Storyside rather than other publishers, and on the other, of keeping revenue within the group, as royalties are linked to listens. The complainant's description of the alleged conduct provides grounds for investigating whether this may constitute unlawful self-preferencing.
The Competition Authority has requested the assistance of the Swedish Competition Authority in investigating the case, on the basis of the cooperation agreement between the Nordic competition authorities.
The matter has also been reported to the EFTA Surveillance Authority (ESA) for alleged breaches of Article 54 of the EEA Agreement, which is applied in parallel with the provisions of Icelandic competition law when it is considered that the alleged abuse may affect trade between the contracting parties/member states.
The Competition Authority emphasises that the decision to launch a formal investigation neither constitutes a finding of an infringement nor indicates the final outcome of the investigation. The decision merely signifies that a formal investigation has been initiated.
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