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No Illegal State Assistance to Vodafone

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No Illegal State Assistance to Vodafone

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The Icelandic authorities’ contract with Vodafone for the rental of a fiber optic cable owned by NATO did not count as illegal state assistance.

This is the verdict of the EFTA surveillance autority, the ESA. The case against the Icelandic State, which under its membership of the EFTA European free trade agreement must not interfere to skew open competition in the private sector, has been running since 2008.

In 2008, the Central Public Procurement Agency rented out use of two out of the three NATO fiber optic cables, which had been used for defense purposes, to Vodafone.

Following this arrangement, telecommunications network provider Míla complained to the ESA in 2010—claiming it had been effectively locked out of the bidding for the deal due to provisions in the contract.

The ESA response in 2012 was that the contract was not illegal state aid to Vodafone, as the contract had been well advertised and had gone through the proper channels.

That decision was appealed to the EFTA court, which overturned the ESA decision in January 2014. The ESA launched a formal inquiry as a result. That inquiry has now concluded that the original ‘not guilty’ verdict was indeed correct, RÚV reports.

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