The Reykjavík District Court has today confirmed that Byko committed serious breaches of competition law and increased the imposed fine to 400 million krónur. The Competition Appeals Board had considered a 65 million króna fine to be appropriate.
The background to the case is that in May 2015, the Competition Authority concluded that Byko had breached competition law and the EEA Agreement through extensive illegal collusion with the former Húsasmiðjan. This concerned price-fixing on important building materials. The case began when Múrbúðin approached the Competition Authority and reported attempts by Byko and the former Húsasmiðjan to get Múrbúðin to take part in the illegal collusion. The Competition Authority considered this to be a serious infringement and imposed a 650 million króna fine on Norvik, Byko's parent company.
Norvik and Byko appealed the decision of the Competition Authority to the Competition Appeals Board. In October 2015, the board concluded that Byko had participated in illegal price-fixing and breached competition law. However, the panel did not find that the provisions of the EEA Agreement had been breached. The panel also considered that Byko's infringement was not as serious as the Competition Authority had assumed. The panel therefore deemed it appropriate to reduce Byko's fine from 650 million krónur to 65 million krónur.
Under competition law, the Competition Authority is tasked with assessing whether the public interest, inherent in effective competition, requires that decisions of the Competition Appeals Board be referred to the courts. Furthermore, the Competition Authority is tasked with applying the competition rules of the EEA Agreement. The Competition Authority therefore brought proceedings before the district court, arguing that the Competition Appeals Board had misinterpreted the EEA Agreement. Furthermore, the panel had not properly assessed the seriousness of Byko's infringements, and its fine could not ensure an adequate deterrent effect. Such an effect is important to ensure that companies do not distort competition to the detriment of consumers. The Competition Authority demanded that Byko's fine be increased.
In its judgment today, the Reykjavík District Court found that Byko's offences had been serious and increased the company's fine to 400 million krónur. In the district court's view, it cannot„There was some doubt as to whether this constituted consultation within the meaning of competition law.“ By their conduct, the associations had maintained product prices and increased their profit margins at the expense of customers. The judgment states that the appeal board's finding was „too low. What is of particular significance here is that this was a serious infringement on a market between dominant undertakings, committed with the aim of strengthening their position at the expense of consumers. The infringement thus breached the important interests of the general public.“ The court also found that the provisions of the EEA Agreement had been breached.
Background information:
The offences in this case are not related to the current operators of Húsasmiðjan. The investigation into Húsasmiðjan's involvement in the case concluded in July 2014. In a settlement dated 9 July 2014, the former operator of Húsasmiðjan, Holtavegur 10 ehf., acknowledged that the old Húsasmiðjan had engaged in illegal collusion with Byko.
In accordance with its statutory role, the Competition Authority referred the directors and employees of Byko and the former Húsasmiðjan to the police for their part in the collusion. In a Supreme Court judgment in case no. 360/2015, eight employees of the companies were found guilty.
The EFTA Surveillance Authority considered this case before the Reykjavík District Court„raise important questions regarding the interpretation of EEA law.“She was the first to exercise, in this country, the power to submit observations in proceedings before the courts of the EFTA States. See more here:
http://www.eftasurv.int/press–publications/press-releases/competition/nr/2690
