Competition appeals committee confirms Samskip's extensive and serious cartel infringement
Samskip appealed the decision of the Competition Authority (Case No. 33/2023 , dated August 31, 2023) to the Competition Appeals Committee and demanded, among other things, that it be annulled.
In a ruling issued today, the Competition Case Appeal Committee confirmed that Samskip had engaged in illegal cartel with Eimskip between 2008 and 2013. The ruling imposes a fine of 2.3 billion Icelandic krónur on Samskip for serious and extensive infringements of Article 10 of the Competition Act and Article 53(1) of the EEA Agreement. Additionally, Samskip is fined 100 million krónur for violating its duty to provide information under Article 19 of the Act.
The investigation into the collusion between Samskip and Eimskip began following a dawn raid conducted by the Competition Authority at the companies' premises in the fall of 2013, with another raid conducted in 2014. The investigation revealed that the companies had been involved in illegal collusion, which they significantly increased in 2008. For that purpose, the top executives of the companies met at the offices of the investment company of the main owner of Samskip on June 6, 2008, where they decided to start an extensive collusion project called "New Beginning."
The ruling of the Appeals Committee confirms that "the appellants (Samskip) violated Article 10 of the Competition Act and Article 53(1) of the EEA Agreement with a multifaceted and long-term illegal cartel with Eimskip during the investigation period. This included collusion between the companies in 2008 as part of the 'New Beginning' project, which started in June 2008 and was aimed at disrupting competition, as well as collusion regarding changes to Eimskip's shipping system that were implemented at the end of July of the same year [...] It is also proven that the companies engaged in market allocation (the 'Peace') that involved avoiding competition for each other's key customers, which lasted from 2009 to 2012 [...] Additionally, the companies colluded on specific pricing matters and other sensitive competition issues."
The Appeals Committee's ruling states that specific collaboration between Samskip and Eimskip was not a violation but, "nonetheless the conclusion is to confirm the contested decision regarding its most significant aspects as previously explained."
In evaluating the fines, the Appeals Committee states that Samskip's infringements were "extensive and occurred over a period of four and a half years, from June 2008 to the end of 2012, as previously outlined. The violations took place in markets that were of national economic importance, where the appellants and Eimskip were in a dominant position and where oligopoly prevailed. During the investigation period, the value of exports was 29–35% of GDP and the value of imports was 26–30%, with most of the transport to and from the country being by ship. This includes a significant portion of consumer goods imported into the country, as well as supplies and operational products for manufacturing companies (see Section 35.2.5 of the contested decision). It is therefore evident that a cartel among shipping companies can lead to increased transportation costs, causing significant harm to consumers and businesses and reducing competitiveness. Additionally, it should be noted that the violations occurred while Icelandic society was still dealing with the consequences of the 2008 economic crash, and it was crucial for active competition to prevail in transportation markets."
The Appeals Committee also states that Samskip's violations "of the duty to provide information under Article 19 of the Competition Act were also serious, as they were likely to hinder the investigation of the case. Since the duty of companies to provide information is a crucial prerequisite for effective investigations by competition authorities, it is essential that penalties for violations of this duty to have a deterrent effect."
Eimskip's involvement in the infringements ended with a settlement made with the Competition Authority in 2021. Through this settlement, the company admitted to the infringements, paid an administrative fine of 1.5 billion krónur, and committed to take specific actions to prevent further violations and promote increased competition.
Previously, the Dutch competition authority had imposed fines on the companies for serious illegal collusion in the frozen storage market in the Netherlands between 2006 and 2009. These storage facilities were used in the export of Icelandic seafood. Eimskip accepted the Dutch authority's ruling, but Samskip appealed the case to local courts, which confirmed Samskip's violations. The case was concluded with a ruling from the appeals court in November 2024.
The decision of the Appeal Committee can be found here .