NMa closes investigation into security services sector

The Netherlands Competition Authority (NMa) has closed its probe into possibly anti-competitive practices in the security services sector (turnover of well over EUR 1 billion). The investigation into the sector (focusing on manned guarding in particular) has not yielded concrete evidence for establishing an infringement of the Competition Act.

In 2006 the NMa started an investigation into suspected restrictive agreements concluded between some security firms and among members of a branch association of private security organisations [Vereniging van Particuliere Beveiligingsorganisaties (VPB)]. The investigation also involved on-site company visits.

Manned guarding constitutes the largest segment within the security services sector. Over the past years, the sector has been under price pressure, as is apparent from the investigation. Pressure on prices and margins was caused on both the demand and supply side of the market. On the part of buyers, purchasing processes are well managed, featuring regular procurement exercises. Among suppliers of security services, price competition is fierce; the sector itself speaks of 'price diving'.

Part of the investigation was based on the suspicion that several security firms had entered into anti-competitive agreements in order to offset the lagging price development. The investigation concerned has not yielded evidence of illegal collusion. If the NMa were to acquire new information or indications of possible infringements, it would be entitled to re-open the investigation or commence a new investigation.