Published October 15, 2014
On Tuesday, the Icelandic Competition Authority filed a complaint against eleven high-level employees of shipping companies Eimskip and Samskip for illegal collaboration. Among those accused of anti-competitive conduct are Eimskip’s CEO Gylfi Sigfússon and Samskip’s CEO Pálmar Óli Magnússon. The complaint describes the alleged violations as a potential cause of “great financial damage” to the public.
The charges are based on a long-standing investigation, which led to repeated search warrants in the premises of both companies, as well as their subsidiaries, involved in transports on land and sea. These include Samskip’s Landflutningar and Jónar Transports, as well as Eimskip’s TVG Zimsen and Flytjandi. Combined, these hold two thirds of the country’s transport market. Allegedly the companies divided the market among themselves, collaborating to diminish competition.
Half of consumer goods are imported
According to RÚV’s Kastljós, some larger companies, involved in imports, attempted to move their business from one transport company to the other and were either outright refused services, or offered more or less exactly the same prices by both. Kastljós quoted an internal report by Samskip’s marketing department, which stated explicitly that “the emphasis in sales in 2011 will by and large depend on whether the import markets stay calm. It is presumed that neither Eimskip nor Samskip will impede much but rather emphasize raising prices.” The same note is struck in various citations from sources within both companies, as well as their subsidiaries, dating back at least to 2008. Interviewed by Kastljós, economics professor Þórólfur Matthíasson commented that half of all consumer goods in Iceland are imported, and that anti-competitive collaboration among the shipping giants can thus have grave consequences for the public at large.
Highest possible sentence: 6 years
By filing the complaint, the Competition Authority refers the case to the office of Special Prosecutor, which will decide on the following procedure. According to article 41 of the Competition act, the highest sentence for the alleged conduct is six years in prison. The two shipping companies are reportedly also under investigation at the hands of Dutch competition authorities.