Já hf. fined 50 million ISK for abuse of dominance

12/2/2014

The Icelandic Competition Authority (ICA) has fined Já hf., a company that owns and operates the only up-to-date national telephone directory database relating to all Icelandic telephone numbers, 50 million ISK (approx. 323 thousand Euros) for abusing its dominant position in the market.

The Authority also instructed Já to give competitors equal access to Já's database at a fair price. This is to ensure that companies who wish to provide comprehensive Directory Enquiry (DQ) services to end users can access the necessary data to do so.

In the ICA's decision, dated November 7, 2014, it is concluded that Já is an undertaking in a dominant position in the relevant markets. Já also is in possession of an essential facility and uses itself that facility in its operation on the market. It is also concluded that Já abused its dominant position by offering unfavourable terms to competitors, without objective justification. This abuse amounts to refusing access to the database (i.e. refusing access to an essential facility). With this behaviour Já has been able to use its power in the wholesale market to protect and strengthen its position in the relevant retail markets for DQ services. In particular, by refusing to grant access to a competitor, by proposing less favourable terms to the competitor than those that its own services enjoy and thus imposing a competitive disadvantage on its potential competitors. The refusal at issue is liable to eliminate all effective competition on the markets concerned.

The ICA´s investigation was based on complaints from two privately owned companies, Miðlun ehf. and Loftmyndir ehf. In 2009 and 2010 these companies sought to gain access to the national database that Já maintains in order to compete in the retail market for DQ services. These companies complained first to the Post- and Telecom Administration (PTA) in Iceland, which concluded, after performing a detailed cost analysis, that Já's prices were excessive by 3000 to 11000 percent. The PTA therefore determined that Já was obliged to grant third party access to the National Directory Database in a fair, cost-oriented and non-discriminatory manner. The PTA also determined the fair price. Já appealed to the Rulings Committee for Electronic Communications and Postal Affairs. The Committee annulled the part of the PTA's decision that dealt with third party access to the database and stated that, under the Electronic Communications Act, the PTA was not authorized to obligate Já to grant third party access to the database. The Committee however stated that such an obligation could possibly be imposed under the Competition Act. The PTA therefore forwarded the case to the Competition Authority.

In its decision the ICA concludes that Já has seriously breached Article 11 of the Competition Act and abused its dominant position by its actions. The ICA found that Já has been able to use its power in the wholesale market in order to protect and strengthen its position in the relevant retail markets for DQ services as stated above. With reference to the facts in the case the ICA deems it fitting to lay an administrative fine on Já to the amount of 50 million ISK (approx. 323 thousand Euros) for this breach. According to the decision Já is also obligated to ensure equality, objectivity and transparency towards all potential DQ service providers seeking access to necessary directory information in its database. This implies that Já's competitors shall have the same access to necessary information on the same terms, conditions and quality as enjoyed by Já itself at all times.

The assessment of the Competition Authority is that the decision will serve to promote a considerably healthier competitive environment and enhance competition in the market for DQ services, with resulting benefits for consumers.