The Supreme Court today upheld the ruling of the Competition Appeals Board in the English football case that Telenor had breached an agreement it made with the authority. Telenor was ordered to pay a 400 million króna fine to the state treasury as a result.
The agreement in question from 15 April 2015 (the so-called television agreement) was intended to prevent Síminn from using its broad range of services to limit competition to the detriment of the public.
The breach by Síminn consisted of adding the television channel Síminn Sport with the English Premier League to the so-called Home Package, while the company increased the price for a subscription to the package. At the time, subscribers to the Home Package numbered in the low thousands, and the CEO of Síminn described this intertwining of the company's services as a way for it to gain „40,000 subscribers straight from day one“. Subscribers to the Home Package could not decline the television channel without cancelling their subscription to the package, but would then have to pay a much higher price for the telecommunications service they had previously received with it. The Competition Authority in Decision no. 25/2020 that this constituted a serious breach by Síminn, and that conclusion was confirmed in a ruling by the Competition Appeals Board in Case no. 1/2020 . The Supreme Court has now confirmed that decision.
The Supreme Court's judgment states that subscribers to the Home Package did not have the option of declining access to the television channel in isolation and retaining the other services in the package, both the telecommunications service and the other television services, except by cancelling their subscription. Had they purchased individual services from Síminn, this would inevitably have resulted in a significant price increase.
The Supreme Court's judgment states that Síminn must fully understand the content and purpose of the settlement it made with the Competition Authority. The Supreme Court rejected the argument from Síminn that the wording of the television settlement was unclear or that there was any doubt regarding its interpretation. In this regard, it was noted that Síminn had requested that the terms of the settlement be waived, but in light of the conditions and the detailed reasoning in the Competition Authority's decision to reject that request, the company must have been fully aware that the said commercial terms conflicted with the conditions of the settlement.
The Supreme Court, however, considered that the case had not been fully informed as to whether the conduct of Síminn constituted a breach of another settlement (the so-called organisational settlement) which the company entered into with the Competition Authority on 23 January 2015 (Decision no. 6/2015). In accordance with the ruling of the Competition Appeals Board, that part of the case was referred to the Competition Authority for further proceedings.
The initial investigation by the Competition Authority began following a complaint from Síminn (Vodafone) in 2019. In 2012, the Supreme Court upheld the decision of the Competition Appeals Board that Síminn had breached substantially the same provisions as those found to have been breached in today's Supreme Court judgment.
In its initial ruling, the Competition Authority ordered Síminn to pay a 500 million króna fine to the state treasury, but the Competition Appeals Board reduced the fine to 200 million króna.
Both Síminn and the Competition Authority brought a case concerning the appeal board's decision before the Reykjavík District Court. Both the district court and the Court of Appeal rejected that Síminn's conduct constituted an infringement. The Supreme Court has now overturned that decision and increased Símans' fine to 400 million krónur, which is a doubling of the amount of the fine imposed by the appeals board in its ruling. The reasoning of the Supreme Court's judgment refers to the importance of ensuring a deterrent effect.
Under the Competition Act, the Competition Authority is tasked with protecting the public interest, in particular by enforcing the law's mandates and prohibitions and by taking action against anti-competitive conduct by companies. With an amendment to the Competition Act in 2011, the Competition Authority was granted the power to bring legal action against decisions of the Competition Appeals Board. It was considered important that the authority should have the ability to protect the public interest in competition matters in court.
The Supreme Court's ruling confirms the importance of the power of litigation, but critics have been vocal that the institution should not have such a power.
The Supreme Court's judgment is available here .
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