The Norwegian Competition Authority has imposed a fine of 766 million NOK on Verisure AS and last year a fine of 467.3 million NOK on Sector Alarm for collusion in the market for the provision of alarm services to residential customers.
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The Authority has concluded that Verisure and Sector Alarm, by far the two largest players in the market, have engaged in market sharing practices in the period from 2011 until 2017.
The Authority’s decision to fine Verisure was sent to Verisure today. Sector Alarm chose to accept the fine shortly after receiving the Authority’s Statement of Objections in June 2019, in which it was told that the Authority considered imposing a fine. The Authority, therefore, adopted a decision directed against Sector Alarm last year.
Verisure and Sector Alarm agreed not to sell alarm services to each other’s customers through door to door selling. From 2011 until 2017, both companies limited the extent to which their door to door sales representatives could sell alarm services to the other company’s customers, says Director General Lars Sørgard.
During the period in question, there was a substantial number of direct contacts between the two companies. This included physical meetings, telephone conversations and e mail correspondence. The two companies provided each other with detailed information about market strategies. They encouraged each other to comply with the agreed practices, and threatened each other with retaliatory measures when detecting deviations. In this manner, they managed to maintain and stabilise their collusive behaviour.
The illegal conduct took place throughout Norway. The difference in the imposed fines is due to differences in the companies’ relevant sales.
A large proportion of Norwegian households has installed home security systems in their homes and the market for alarm services is highly concentrated. Market sharing restricts competition and normally leads to higher prices and/or reduced product or service quality.
In this case, the market sharing practices consisted of an arrangement whereby the two companies’ door to door sellers should refrain from giving competing offers to the other company’s customers. ■