In a decision published today, the Competition Authority has concluded that Securitas hf. abused its dominant market position in the market for home and business security services. Securitas's infringement consisted of the company entering into exclusive contracts with its customers for its so-called Home Protection and Business Protection services, which prohibited customers from contracting with other service providers for several years. The contracts also contained provisions designed to create increased customer loyalty to Securitas.
The Competition Authority has concluded that Securitas was the market leader in home and business security services. The company held a significant advantage in this field, with a market share of around 65-70% during the period under review, 2006-2011. The company's exclusive purchasing agreements therefore had a significant exclusionary effect, limiting the ability of smaller competitors to gain additional business or for new entrants to enter the market.
Under Securitas's contracts, the company's clients have been bound to do business with it for at least three years. In the case, Securitas has argued that the contracts constitute an instalment payment arrangement and that the company's risk would be significant without this binding period. The decision does not fully accept these explanations, concluding instead that from a commercial perspective, Securitas cannot justify such a long commitment period.
It is therefore the conclusion of the Competition Authority that Securitas's exclusive purchase agreements, with a three-year binding period and provisions that create increased customer loyalty to the company, constitute an abuse of a dominant position in the market and a breach of Article 11 of the Competition Act. For these infringements, Securitas is ordered to pay an administrative fine of 80 million króna to the state treasury.
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