Complaint by Fjarskipta hf. regarding Farice ehf.

The Competition Authority has been reviewing complaints concerning the alleged abuse of a dominant market position by Farice ehf. (Farice). These complaints relate in particular to Farice offering data centres a lower price for data transmission services than it does to telecommunications companies in Iceland. The matter concerns, on the one hand, the competitive conditions in the telecommunications market, and on the other, the interests involved in the development of data centres.

Initially, the Competition Authority received a submission from Fjarskiptar hf. (Vodafone), dated 27 September 2012, in which it complained of Farice's alleged abuse of its dominant market position. From the outset, the Competition Authority concluded that there were no grounds for the adoption of the interim measures that had been requested. Instead, the Competition Authority gathered further evidence and views in order to shed light on the matter and the development of the relevant markets. Although both telecommunications companies and data centres purchase data connections from Farice, they cannot be considered competitors, as they do not operate in the same service market in Iceland. Farice's commercial terms for data centres were subject to the condition that they use the purchased data transmission solely for their own operations. This was done so that they would not use the purchased data transmission to undercut telecommunications companies in the sale of services in the telecommunications market. By doing so, Farice has separated the services of data centres and telecommunications companies into two separate markets, but should data centres wish to operate in the telecommunications market, they will be subject to the same terms from Farice as other telecommunications companies in the country.

In light of the above, the Competition Authority concluded that telecommunications companies and data centres are not competitors operating in the same service market in this country. In light of this, as is further justified in the decision, it was not considered necessary to take further action in the matter.