The Competition Authority advises Storytel to exercise caution.

The Competition Authority advises Storytel to exercise caution in its marketing and pricing offers during a sensitive period when a new entrant is trialling the market.

The Competition Authority has been reviewing a complaint from the audiobook provider Sagnaland, which alleged that Storytel had abused its dominant market position. Sagnaland believes that Storytel responded to Sagnaland's launch by introducing a much lower offer than that of its standard price list. Sagnaland refers to Storytel's dominant market position and that the company's actions are likely to harm a small competitor that is starting up in the Icelandic audiobook market.

The letter said:

„Although competition is generally a good thing for consumers, questions are raised as to whether such a rapid and specific price response by a dominant market player with over 50,000 users (the only one in Iceland) can be considered an unfair business practice, especially if the aim is to prevent new entrants from entering the audiobook market.“

The Competition Authority sent a letter to Storytel, announcing that it was considering taking provisional measures regarding Storytel's alleged predatory pricing. The company was also asked for further information and its views. In the letter, the Competition Authority pointed out that the consequences of a dominant company's predatory pricing can be that weaker competitors see no reason to compete and may be forced to cease trading. It is considered particularly serious when a company with a significantly strong market position uses undercutting in connection with the entry of a new competitor that is trying to gain a foothold in the market.

In its responses, Storytel stated, among other things, that it did not consider itself to be the market leader and rejected that the offer in question, which had been aimed at a limited group of former subscribers, constituted harmful undercutting.

After reviewing the case file, the Competition Authority considers that there are no grounds at this stage to take provisional measures in relation to the matter. In assessing whether there were grounds for an interim decision, consideration was given, among other things, to the fact that Storytel submitted evidence suggesting that the offer in question had not been specifically directed at Sagnaland's entry into the market.

However, the Competition Authority has urged Storytel to consider its market position and exercise particular caution in its marketing and customer offers during a competitively sensitive period when a new entrant is trying to gain a foothold in the market.

The Competition Authority may still take the matter for further investigation at a later stage, if it deems it necessary. Furthermore, the Competition Authority is examining Storytel's conduct in a separate case, where, among other things, it is considering how to define the markets in which Storytel operates.

Background information:

The Competition Authority is authorised to make interim decisions in individual cases if:

a) It is likely that the conduct or circumstances under consideration contravene the provisions of competition law or decisions taken on the basis thereof, or that the actions of public authorities have an adverse effect on competition and

b) It is likely that a delay in the Competition Authority's final decision will lead to a disruption of competition which will be remedied by the final decision, or the matter otherwise does not admit of delay.

You can read the letter issued by the Competition Authority regarding this. here.