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Conditions imposed on the merger of Dagsbrún hf. and Securitas hf.

7/25/2006

In January of this year, Dagsbrún hf. acquired all the shares in Securitas hf.  Dagsbrún hf. is the parent company of Og fjarskipti hf. (Og Vodafone), the second largest telecommunications in Iceland, and 365 ljósvaka- og prentmiðlar, the largest media company of its kind in Iceland. Securitas operates in the market for alert services, which, among other things, involves remote monitoring of homes, undertakings and summer cottages where telecommunications equipment is used for monitoring purposes. In the opinion of the Competition Authority Securitas is dominant in the market for alert services.

It is the conclusion of the Competition Authority that the merger of Dagsbrún and Securitas could, in the absence of other measures, restrict the existing competition and also present barriers to entry for new participants in the alert services market. It is also the opinion of the Competition Authority that the merger could result in the bundling of services from different service markets with resulting in a lack of transparency in prices and in disruption of competition. For this reason the following conditions are imposed on the merger, which Dagsbrún has agreed to observe:

  1. Securitas shall not establish as a condition for the purchase of services provided by the company that any other service of another subsidiary must form a part of the purchase. Furthermore, Securitas is prohibited from pricing its services offered together with the services of another Dagsbrún subsidiary so that the pricing of the offer constitutes in effect a condition that one service must be purchased with another.
  2. The material conditions of Paragraph 1 apply also to subsidiaries of Dagsbrún other than Securitas.
  3. If Securitas offers its service jointly with the service of another Dagsbrún subsidiary the price of each service shall be specified in the offer. The same applies if other Dagsbrún subsidiaries offer their services in tandem with Securitas services.
  4. Violation of these conditions is subject to sanctions pursuant to Chapter IX of the Competition Act No. 44/2005. As regards the legal grounds and reasoning for the decision reference is in other respects made to the Decision of the Competition Authority No. 34/2006.
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