The Competition and Markets Authority (CMA) will investigate whether the “big six” energy suppliers were anti-competitive and manipulated the price of energy sold to consumers.
Energy regulator Ofgem called for an inquiry by the CMA in a report where they found “possible tacit co-ordination” on the timings and size of price rises. The profit rises that coincided with the price rises in October and November 2013 intensified public distrust in the suppliers, which has pushed Ofgem to act and clear the air with a public investigation.
Centrica, E.On, EDF Energy, RWE Npower, Scottish Power, and SSE control 95% of the UK’s energy supply market have not been accused of collusion, but Ofgem criticised the effectiveness of competition between the six.
Dermot Nolan, Ofgem Chief Executive, said:
“Ofgem believes a referral offers the opportunity to once and for all clear the air and decide if there are any further barriers which are preventing competition from bearing down as hard as possible on prices.
The CMA has powers, not available to Ofgem, to address any structural barriers that would undermine competition. Now consumers are protected by our simpler, clearer and fairer reforms, we think a market investigation is in their long-term interests.”