The Norwegian Competition Authority has today 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.
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.
Market sharing
– 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.
Serious infringement
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.
– Each economic operator must determine independently the policy, which it intends to adopt on the market. Verisure’s and Sector Alarm’s coordination of their market conduct in this case, amounts to a serious infringement of the Competition Act, and may have resulted in more expensive alarm services for residential customers. The amount of the fines imposed in this case reflects the fact that market sharing is a very serious competition law offense, says Director Hanne Dahl Amundsen.
About the investigation
• The Norwegian Competition Authority carried out unannounced inspections at the premises of Verisure AS and Sector Alarm AS on 20 June 2017. During the inspections, the Authority seized documents and electronically stored material.
• After the inspections, a substantial amount of evidence was systemised and examined.
• From February 2018 until September 2020, the Authority conducted interviews with employees from both companies.
• On 17 June 2019, the Authority issued a Statement of Objections, in which Verisure and Sector Alarm were informed that the Authority considered imposing fines for collusive behaviour on both of them.
• Sector Alarm AS chose to accept the fine prior to the deadline for submitting a reply to the Statement of Objections. On that basis, the company submitted a short reply to the Authority in June 2019, and, on 4 July 2019, the Authority adopted a decision imposing a fine of 467.3 million NOK on Sector Alarm AS.
• Verisure AS submitted its reply to the Statement of Objections in November 2019.
• The Competition Authority’s final decision, in which a fine of 766.0 million NOK was imposed on Verisure AS, was sent to Verisure AS on 25 November 2020.
• The Authority’s decision may be appealed to the Competition Tribunal within six months.
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Director Hanne Dahl Amundsen.