Regulators to launch official probe into energy market competition


Ofgem and the Competition and Markets Authority (CMA) will launch an official investigation into the actual level of competition between the UK’s Big Six suppliers following an official report from the former on the State of the Energy Market.

The report provides an in-depth look at the energy market and raises a number of very serious concerns, such as the existing barriers to entry for independent suppliers and “persistent” high market shares of the largest energy companies.

Declining consumer confidence was also quoted as a very serious issue, with 43% distrusting energy companies to be open and transparent.

Addressing the matter of market competition, Ofgem’s report ruled out “explicit collusion” between suppliers, it did point out significant evidence of “possible tacit coordination” with suppliers putting up prices at similar times and amounts, an approach that reduces competition and worsens outcomes for consumers.

This actually marks the first full-scale competition probe into the energy market and would see the UK’s biggest suppliers come under an unprecedented level of scrutiny.

Secretary of State for Energy and Climate Change, Ed Davey said:

“This is tough action based on a detailed, independent expert assessment of the state of competition in Britain’s energy markets – leading to the first ever market reference for the energy markets.

“This is just too important for people to rely on guesses about how to fix the energy markets. If we get it wrong, consumers will pay the price.”


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