ICA‘s investigation of Eimskip‘s collusion violations concluded with a settlement
The Icelandic Competition Authority (ICA) has been investigating possible infringements of Article 10 of the Icelandic Competition Law and Article 53 of the EEA agreement by Eimskip and Samskip. The alleged infringements in question concern a collusion between the two undertakings in the markets for maritime shipping, land transport, freight forwarding and related services, mainly in the period from 2008 – 2013.
According to a joint statement from June 9th in 2021, Eimskip approached the ICA with a request to enter formal talks with the ICA on a possible settlement that would conclude the investigation as regards Eimskip. Article 17. f. of the Icelandic Competition law Act permits ICA to finish all investigations with a settlement, regardless of which stage the investigation is in. ICA agreed to enter settlement talks.
On June 16th in 2021 ICA and Eimskip signed a settlement which includes Eimskip admitting to serious violations of competition law, a payment of ISK 1.500.000.000 fine in addition to committing to taking actions to prevent possible future violations.
Serious violations acknowledged
According to the settlement Eimskip admits to having committed serious violations of Article 10 of the Icelandic Competition Law and Article 53 of the EEA agreement. Eimskip acknowledges the following violations in the investigation period which began after a meeting between Eimskip and Samskip on June 6th in 2008.
· Collusion with Samskip in the latter part of 2008 regarding changes in sailing systems and limiting in transportation capacity in maritime shipping to and from Iceland.
· Collusion with Samskip in allocating larger customers in maritime shipping and land transport markets. This collusion was less in scope in the year 2013.
· Collusion with Samskip regarding fees and discounts for transportation services and exchanging important information regarding prices and business matters. This collusion was less in scope in the year 2013.
· Collusion with Samskip in land transport regarding transportation routes in Iceland and dividing the market in connection with certain transportation routes.
· Collusion with Samskip on maritime shipping between Iceland and other European countries as well as other actions aimed at restricting competition in transportation services.
· Collusion with Samskip on maritime shipping between Iceland and North America when an exemption from Article 10 of the Icelandic Competition Law was not in force.
Eimskip also admits to collusion with Samskip before the meeting between the two undertakings on June 6th 2008. However, that collusion was of a smaller scope than the one that started after the June meeting.
In addition, Eimskip acknowledges violation of Article 19 of the Icelandic Competition Law by not giving necessary or accurate information or neglecting to hand over data for the sake of ICA’s investigation.
Actions to prevent repetition of violations
A part of the settlement is Eimskip’s binding commitment to taking actions to prevent future violations and strengthen competition. That includes active internal control and education as well as making sure that key employees and directors are aware of the importance that competitors in oligopolistic markets are independent of each other and the strict ban under competition law of any communication with competitors or possible competitors that are capable of restricting competition.
Eimskip also commits to reviewing all contracts the company has with other companies in the transportation sector. Furthermore, Eimskip is obliged to end all business relations with Samskip and other transportation companies that Samskip has business relations with. This is not applicable if Eimskip can prove to ICA that the nature of the relationship will not have disruptive effects on competition between Eimskip and Samskip.
Eimskip pays fine
According to the settlement Eimskip has agreed to pay a fine of ISK 1.500.000.000 as a result of the aforementioned violations. The fine will be paid to the Icelandic state treasury. In determining the fine, due account is taken of the company’s will to step forward and admitting to serious violations in addition to committing to measures that prevent future violations and strengthen competition. According to Icelandic competition law such initiatives can lead to lower fines.
Samskip is still under investigation
By signing the settlement agreement ICA has ended its investigation on Eimskip. However, the alleged violations of Samskip remain under investigation.
Background information
ICA´s investigation began with a dawn raid on 10 September 2013. A further dawn raid was conducted in June 2014. The investigation has since been conducted continuously and without delays as regards the ICA. The scope of the investigation is without precedent for the ICA. The case of Eimskip and Samskip has been a top priority at the ICA from the beginning and both parties have had an opportunity to give their comments to ICA´s preliminary assessment, explained in two statements of objections. The former statement was introduced to the companies in June 2018 and the latter in December 2019. The parties´objections and comments were available to the ICA by the end of August 2020. Both parties denied any violation of Article 10 of the Icelandic Competition law Act and Article 53 of the EEA agreement.
As a consequence of signing the settlement agreement, Eimskip’s former objections as regards alleged violations have no bearing in the conclusion of the case.
The signing of a settlement agreement has a binding effect for the company concerned, according to article 17. f. of the Icelandic Competition law Act.