link to original reddit post by /u/GnB_throwaway
The problem with cartels in is that they are internally unstable as firms in the cartel have an incentive to backstab their co-conspirators.
This might apply to any other industry, but security is different. Security firms are in the business of force. A security cartel can prevent dissent by the threat of force. While any one firm has an incentive to defy the cartel if it can get away with it, it also has an incentive to make sure another firm doesn’t do the same. If any one firm defies the cartel, all other firms will be happy to see it punished.
The result is that you get a stable, self-regulating cartel. Why would this not take place?