Supreme Court upholds decision against publishing companies

The Supreme Court has unanimously ruled in favour of the Norwegian Competition Authority in a case against the two the publishing companies Cappelen Damm and Gyldendal. The Supreme Court found that the collective boycott of the distributor Interpress by Cappelen Damm and Gyldendal, together with two other publishing companies, constituted a restriction of competition by object in violation of Section 10 of the Competition Act.

The unanimous Supreme Court ruling, which was handed down on 21 May 2021 and received by the Competition Authority on 25 May, rejects the appeals from Cappelen Damm and Gyldendal.

The Supreme Court concluded that the Court of Appeal did not make any errors in law when finding that the exchange of information between the competing publishing companies, and the joint decision not to deliver books to Interpress, constituted a restriction of competition by object. With reference to EU case law, the Supreme Court found it unquestionable that the exchange of information removed the uncertainty that the publishing companies might have had about the functioning of the market after Reitan Convenience had decided only to use its own subsidiary, Interpress, for the distribution of books to its retail outlets.

Principle importance
One of the fundamental questions in the case has been whether a collective boycott constitutes a restriction of competition by object in breach of Section 10 of the Competition Act. The boycott consisted of not delivering books to one of two distributors. The only real competitor to Interpress was Bladcentralen, in which the publishing companies had ownership interests.

– We are very pleased with the Supreme Court ruling. It confirms that a collective boycott like the one at issue in the present case restricts competition by object and is fully in line with the Authority’s decision. The ruling emphasises that this type of conduct constitutes a serious violation of the Competition Act, says Legal Director Karin Stakkestad Laastad.

Gyldendal had also appealed against the calculation of the fine. Gyldendal argued that the Competition Authority wrongly had based the calculation of the fine on the turnover of its partly owned subsidiary, and not on the licensing revenues Gyldendal received from that subsidiary’s book sales. Gyldendal referred to that the subsidiary was a different undertaking from Gyldendal, jointly controlled by Gyldendal and Aschehoug, and, therefore, not the same «undertaking» under Section 2 of the Competition Act.

The Supreme Court rejected Gyldendal’s appeal also on this point and stated that the key was whether the turnover of the subsidiary was only a result of the way in which Gyldendal had organised the commercialization of its book publishing rights. Referring to EU case law, the Supreme Court found that a different approach would have enabled the publishing company to avoid the imposition of a fine proportionate to its importance on the market for the goods in respect of which the infringement was committed and the harm that its conduct did to normal competition.

Borgarting Court of Appeal set the fine imposed on Gyldendal at NOK 6.3 million, which is upheld following the Supreme Court ruling. The parent company of Gyldendal was held jointly and severally liable for the fine.

Read the Supreme Court’s ruling here (in Norwegian)