Alleged abuse of a dominant position by Pennans ehf.

The Competition Authority has today taken an interim decision in response to the action by Penninn ehf. (Penninn) to remove books published by Ugla útgáfa ehf. (Ugla) from sale in its stores. The Authority considers it likely that by returning, amongst other things, Ugla's best-selling books in May and subsequently refusing to do business with the publisher, Penninn has abused its dominant market position in the retail book market.

The interim order directs Pennant to reinstate Ugla's books for sale in its shops and to make them available on its sales systems and website. It is further stipulated that any decisions by Pennant to refuse to do business with book publishers must be based on objective criteria, which are set out in a procedure, and be accessible to the publishers concerned and to the Competition Authority.

Penninn has long been by far the largest bookseller in this country. This is particularly true during the period outside the seasonal Christmas book sale in November and December, when books are also sold in supermarkets. It is of fundamental importance for book publishers that their books are sold in Pennan's shops all year round.

The Competition Authority considers that the refusal to sell was not based on objective grounds, as it concerned new and recent Ugla books that were selling well in Pennans stores. The Competition Authority considers it sufficiently established that Ugla's publication of books in audiobook format was a significant reason for Pennans' decision to stop selling Ugla's books.

In the opinion of the Competition Authority, this conduct by Pennan could, among other things, deter Icelandic book publishers from seeking innovation in the sale of their books. Such a refusal to sell can therefore have serious consequences for book publishers, authors and consumers, even if Ugla's books are returned to sale, either in part or in full. It is therefore important to respond to this refusal immediately, as preparations for the publication of books for next Christmas are already underway.

The interim decision is valid until 31 December 2020. It is available in the attached document.

In a letter dated 22 December 2020, the Competition Authority considered it necessary to extend the validity of the interim decision until 1 May 2021. Here is the letter 

On provisional decisions:

In accordance with the 3rd paragraph of Article 16 of the Competition Act no. 44/2005, the Competition Authority is authorised to make provisional decisions in individual cases if it appears likely that the conduct or circumstances under consideration contravenes the provisions of the Competition Act or decisions taken thereunder. The condition is that the matter cannot be delayed. Such decisions therefore do not constitute a final determination as to whether the actions in question are unlawful.