The Supreme Court confirms that Lyf og heilsa, a pharmacy chain, seriously breached against the Competition Act by abusing a dominant position in the market

By a Supreme Court judgement, in a case no. 355/2012, rendered today, the judgment of the District Court in Reykjavík has been confirmed that Lyf og heilsa abused its dominant position on the market. Lyf og heilsa, which is one of the two big pharmacy chains in Iceland, abused its dominant position in the market by actions aimed against Apótek Vesturlands, a single pharmacy in the municipality of Akranes. The Supreme Court confirms that these were serious offences meant to hinder the entry of a new pharmacy into the market. Lyf og heilsa was the sole operator in the municipality of Akranes before Apótek Vesturlands entered the market . The actions were meant to weaken the new entrant and restrict competition. It is also confirmed that Lyf og heilsa are to pay 100 m. ISK in an administrative fine.

 

This case started when the Competition Authority visited and searched the premises of Lyf og heilsa in September 2007 because of suspected breaches of that undertaking against the competition act. The Competition Authority came to the conclusion, in a decision no. 4/2010, that Lyf og heilsa had abused its dominant position on the market with the explicit purpose to hinder competition. Lyf og heilsa had among other things used targeted discounts in its actions. The Competition Authority imposed a 130 m. ISK administrative fine on Lyf og heilsa for this.

 

Lyf og heilsa appealed to Competition Appeals Committee which confirmed the decision of the Competition Authority but lowered the administrative fine to 100 m. ISK.  Lyf og heilsa appealed the ruling of the Appeals Committee to the District Court of Reykjavík, which confirmed the ruling of the Appeals Committee. Finally Lyf og heilsa appealed to the Supreme Court which confirmed the judgement of the District Court by the judgment rendered today.