Ofgem slaps energy firms with £870k fines for competition law breach
The industry regulator found that E (Gas and Electricity) Limited, Economy Energy, and Dyball Associates had an anti-competitive agreement.
Three energy companies have been slapped with £870,000 in combined fines by the industry regulator after breaking competition law.
Ofgem found that E (Gas and Electricity) Limited, Economy Energy, and Dyball Associates had an anti-competitive agreement.
E and Economy Energy worked with energy software and consultancy company Dyball to ensure that the two suppliers did not target one another’s customers through face-to-face sales.
As part of the agreement, the suppliers shared commercially sensitive information such as customer meter point detail, the watchdog said.
Dyball aided the strategy by designing and implementing 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 thus more likely to be on a more expensive deal, Ofgem said.
Customers should have an opportunity to switch to other suppliers and should not be prevented from doing so by anti-competitive agreements Anthony Pygram, Ofgem
The agreement undermined competition in a market where suppliers typically compete to attract new customers by offering them a better deal, it added.
Ofgem fined E £650,000 and Economy Energy £200,000, with the latter fine due to Economy’s weak financial position after recently entering administration.
Dyball was fined £20,000 by the watchdog for acting as a facilitator.
Anthony Pygram, director of conduct and enforcement at Ofgem, said: “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.”