Main developments in Competition Law and Policy by 2024 – Iceland

The year 2024 was a year of great change for the Icelandic Competition Authority (ICA), as well as Icelandic courts in terms of competition enforcement and merger controls. The EFTA Surveillance Authority (“ESA”) also decided to carry out its first ever unannounced antitrust inspection in Iceland.

Following is a brief overview of the most important developments in Iceland in 2024. It is worth noting that Iceland is a member of the EEA Agreement and Icelandic competition law therefore mainly mirrors EU competition law.

Cartels (sections 10 and 12 of the Icelandic Competition Act / Article 53 EEA)

Competition Appeals Committee suspends fine imposed on Samskip

In August 2023, the ICA found that Samskip, an undertaking active on the transportation market, had unlawfully colluded with its main competitor, Eimskip, thereby violating both Article 10 of the Icelandic Competition Act and Article 53(1) of the EEA Agreement. The ICA imposed a record-breaking fine of 4.2 billion ISK as well as structural sanctions on Samskip. Samskip appealed to the Competition Appeals Committee, where a final decision is still pending. However, in January 2024, the Appeals Committee decided to

suspend in part the legal effects of the decision by the ICA, i.e. the payment of the fine imposed.

Hreyfill and ICA reach a settlement

The ICA reached a

settlement with Hreyfill, an undertaking active in the taxi sector, following a provisional decision in which Hreyfill was found to have probably violated both Articles 10, 11 and 12 of the Icelandic Competition Act. The ICA found it likely that Hreyfill was an association of undertakings in the sense of Article 12 and that Hreyfill’s refusal to allow taxi drivers under its auspices use the services of another taxi undertaking violated Article 10 of the Icelandic Competition Act. Moreover, the ICA presumed that Hreyfill was in a dominant position in the market for taxi stations and its behavior was deemed to have likely abused that position.In August, the parties reached a settlement whereby Hreyfill promised not to prevent taxi drivers driving under its auspices to use the services of other taxi undertakings, as well as to make necessary changes to its bylaws and station rules to ensure compliance.

Court of Appeals annuls a ruling by the district court concerning Samskip

In September, the Court of Appeals

annulled a ruling by the District Court of Reykjavik which had previously found that Samskip had a legitimate interest to bring an appeal before the Competition Appeals Committee regarding the annulment of a certain provision in a settlement made between its main competitor, Eimskip, and the ICA. The Court of Appeals annulled

a ruling by the District Court of Reykjavik which had previously found that Samskip had a legitimate interest to bring an appeal before the Competition Appeals Committee regarding an annulment of a certain provision in a settlement made between its main competitor, Eimskip, and ICA. Eimskip also agreed to specific measures that would promote competition. This included, among other things, to cease all business cooperation with Samskip as well as any other undertaking in any kind of transport service if Samskip also cooperated with the relevant undertaking.The Court of Appeals disagreed with the finding of the district court and ruled that Samskip did not have a legitimate interest in receiving a substantive ruling by the Competition Appeals Committee about the legitimacy of this specific measure in the settlement. The Supreme Court of Iceland has agreed

to hear the case. The case will likely be pleaded in the first half of 2025.

Unannounced inspection by ESAIn October, ESA carried out an unannounced inspection

concerning the retail pharmacy market in Iceland. This was the first time that ESA has carried out such an inspection in Iceland.

Abuse of dominance (section 11 of the Icelandic Competition Act / Article 54 EEA)

Court of Appeals confirms annulmentThe Court of Appeals confirmed an annulment

of a ruling by the Competition Appeals Committee in February. The Appeals Committee confirmed a ruling by the ICA, which found that Siminn had violated conditions of a 2015 settlement between the undertakings and the ICA. Siminn was ordered to pay a 200 million ISK fine. The ICA and Appeals Committee both found that Siminn’s pricing of the TV service in question as part of the package was anti-competitive, and not in compliance with the settlement, as it, among other things, limited its competitors’ ability to attract consumers. The Court of Appeals found that the ICA had not proved to the requisite legal standard that Siminn had breached the settlement in question and rejected the theory of harm put forward by the authority.

The Supreme Court of Iceland has agreed to hear the case. The case will be pleaded on January 2025.

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Further rulings by the court regarding the settlement between Siminn & the ICA

In a different case, Siminn requested an annulment of a settlement previously mentioned between Siminn & the ICA after the authority refused to abolish the conditions in the settlement. Siminn demanded the cancellation of the agreement following the sale its subsidiary, Mila. Mila is Iceland’s largest telecoms infrastructure company, which owns an extensive network of fixed broadband, backhaul and mobile access covering the entire nation. The District Court of Reykjavik annulled the ICA’s decision and found that the authority had not laid out a sufficiently solid basis for its decision to refuse Siminn’s demand. The judgment has been appealed to the Court of Appeals and will likely be heard in the latter part of 2025.

In a third ruling concerning the settlement in question, the District Court of Reykjavik dismissed a case brought by Siminn where it claimed that it was not bound by the settlement’s conditions.

Merger control

Court of Appeals confirms blocked merger

The Court of Appeals upheld a ruling by the Competition Appeals Committee confirming a decision by the ICA to block a three-to-two merger in the market for medical imaging services, which include CT scans, x-rays, MRIs, and ultrasounds. The Court of Appeals confirmed that the ICA had a certain amount latitude when assessing whether a merger was intended to reduce the competition in the market. The court concluded that there was little substitution between medical imaging services provided inside and outside of hospitals. Moreover, it concluded that the entry of a new significant competitor into the market was unlikely.

ICA blocks a merger in the market for fertilizer

In June, the ICA blocked the acquisition of Buvis, an undertaking specializing in the sale of supplies and equipment to farmers including fertilizer, by Skeljungur, an undertaking active in various markets including the sale of fertilizer. The investigation revealed Buvis as a significant competitor on the market for import and sale fertilizer. The acquisition had a significant negative impact on the market which was already highly consolidated. It was concluded that the reduction in the number of competitors was likely to have detrimental effects for consumers, including farmers, as the conditions would have become even more suitable for price coordination.

Acquisition of Lyfja by Festi approved

The ICA approved the acquisition of Lyfja, a pharmacy operator, by Festi, an investment company that owns various businesses, including supermarkets and fuel services. Lyfja has a subsidiary called Heilsa ehf. that operates in the wholesale sector of health-related products. The ICA deemed that the proposed merger will have positive effects on the competition in the market of convenience goods, considering the conditions proposed by the parties. The merging parties proposed a complete separation of operations between Heilsa Ehf. Festi for the following five years. Furthermore, the parties also promised to abolish non-compete clauses in employment contracts of all its pharmacists.

Festi settles and agrees to pay a fine

The ICA reached a settlement with Festi in November, with the investment company admitting to having violated a previous settlement with the ICA. Festi agreed to a number of conditions in the previous settlement following a merger on the grocery and fuel markets. Festi admitted that it had violated certain conditions intended to protect and promote the competition in these markets, including its undertaking’s obligation of reviewing its cooperation with one its competitors and providing an independent expert with information and assistance. Festi also admitted that it had violated its duty to provide necessary information to the ICA in connection with their investigation into the merger. Festi agreed to pay a fine of 750 million ISK.

Market inquiries and opinions

In April, the ICA published an opinion regarding the market for blood collection from pregnant mares for the production of the Pregnant Mare Serum Gonadotropin hormone. The opinion, which was directed both towards Isteka, the dominant undertaking on the market, and the Icelandic State, draws attention to several competitive issues on the market and contains measures that, in the opinion of ICA, could promote better compliance with competition law.

The ICA published an opinion in May on the payment participation of the Iceland Health Insurance in medical imaging services outside hospitals. The opinion contains certain measures that the Ministry of Health, Iceland Health Insurance, and other parties can take to increase competition in the market. For example, it provides that the Ministry of Health, Iceland Health Insurance, and other parties can facilitate market entry by monetary contributions on an equal basis.

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