Credit, Collections & Insolvency News
Citizens Advice has responded to Ofgem’s announcement that E Gas and Electricity, Economy Energy and Dyball Associates breached competition law.
Gillian Guy, Chief Executive of Citizens Advice, said “We’ve known for some time that suppliers who were unprepared and unsustainable were able to get into the energy supply market. Today’s action by the regulator shows firms that were willing to break the law were also able to get in.:
“It’s especially troubling that the people affected were most likely pre-payment meter customers, who are more likely to be vulnerable or on low incomes and less likely to switch.”
“Ofgem has taken steps to tighten the rules around who can get into the market, including a fit and proper person test. But this case shows a clear need for stronger rules on supplier conduct and close scrutiny of the management of firms.”
The response follows news that Ofgem that two energy suppliers, E (Gas and Electricity) and Economy Energy, and Dyball Associates, an energy software and consultancy service, have been found to have infringed Chapter I of the Competition Act 1998 and fined collectively £870,000 by Ofgem.
Between January and September 2016 Economy Energy, E (Gas and Electricity) and Dyball Associates had an anti-competitive agreement preventing the two suppliers actively targeting one another’s customers through face-to-face sales.
To facilitate this agreement, the suppliers shared commercially sensitive information in the form of customer meter point details.
Dyball Associates aided this arrangement by designing, implementing and maintaining software systems that allowed customer meter point details to be shared, and recruitment of each other’s customers to be blocked.
The majority of the customers with both suppliers at the time were pre-payment meter customers, who are less likely to switch than those on standard meters and so more likely to be on a more expensive deal.
E (Gas and Electricity) and Economy Energy put forward an argument that they were a combined family enterprise, but this was not accepted by Ofgem.
The agreement undermined competition in a market where suppliers typically compete to attract new consumers by offering them a better deal.
Ofgem has fined E (Gas and Electricity) £650,000 and Economy Energy £200,000 (the latter fine reflecting Economy Energy’s financial position, including that it is in administration). Ofgem has fined Dyball Associates £20,000 for acting as a facilitator.
Anthony Pygram, director of conduct and enforcement at Ofgem, said “Anti-competitive agreements are a serious breach of competition law and could cause widespread detriment and harm to consumers, especially those in vulnerable situations.”
“E and Economy Energy agreed not to target each other’s customers with the assistance of Dyball Associates, leaving some customers potentially worse off by being unable to access deals from the other supplier.”
“Customers should have an opportunity to switch to other suppliers and should not be prevented from doing so by anti-competitive agreements, and suppliers should all have an equal opportunity and compete on a level playing field with rivals.”
“This enforcement action sends a strong signal to suppliers that we will take action and penalise those who undermine competition and do not act fairly.”
