Landsvirkjun fined for serious breaches of competition law

The Competition Authority has today published a decision to impose a 1.4 billion króna fine on Landsvirkjun. Following a detailed investigation, the Competition Authority has concluded that Landsvirkjun seriously abused its dominant market position through its pricing of electricity in Landsnet's tenders between 2017 and 2021. Landsvirkjun's pricing in the relevant tenders meant that its customers, who purchased electricity from Landsvirkjun and participated in Landsnet's tenders in competition with Landsvirkjun, could not sell the electricity without making a loss.

The Competition Authority has concluded that Landsvirkjun is the market-dominant undertaking in the production and wholesale of electricity in Iceland. This conclusion is consistent with the company's own assessment, as reflected in its internal communications and its public statements.

Furthermore, the investigation concluded that between 2017 and 2021, Landsvirkjun abused its dominant market position by selling electricity to its competitors at wholesale prices that were higher than the prices it itself offered in Landsnet's tenders. Thus, Landsvirkjun abused its dominant position in the electricity generation and wholesale market (upstream) by exerting price pressure on the electricity purchase market for transmission losses (downstream).

This conduct made it impossible for Landsvirkjun's competitors, who purchased electricity wholesale from Landsvirkjun and also competed with the company in Landsnet's tenders, to match or offer a better price than Landsvirkjun without losing money on the transaction.