Ofgem finds E Gas and Electricity, Economy Energy and Dyball Associates in breach of competition law

30 May 2019 01:24 PM

Two suppliers, E (Gas and Electricity) Limited 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, yesterday 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.”

Notes to editors

Ofgem has the power to investigate potential infringements of competition law in the energy sector. These powers are held concurrently with the Competition and Markets Authority.
The Statement of Objections is addressed to: (i) Economy Energy Trading Limited (in administration) and Economy Energy Holdings Limited; (ii) E (Gas and Electricity) Limited and E Holdings Ltd; (iii) Dyball Associates Limited and Dyball Holdings Limited.
Chapter I of the Competition Act 1998 prohibits agreements and concerted practices between businesses which have as their object or effect the prevention, restriction or distortion of competition within the UK. Any business found to have infringed these prohibitions can be fined up to 10% of its annual worldwide group turnover, taking into account a range of factors including the seriousness of the infringement, mitigating or aggravating factors and adjustments for proportionality.
The decisions on the infringement and the penalties were made by members of the Enforcement Decision Panel (EDP).
The Enforcement Decision Panel (EDP) was established in June 2014 to take important decisions in contested and settlement enforcement cases on behalf of the Gas and Electricity Markets Authority. The Enforcement Decision Panel are independent of Ofgem. Panel members are selected for each individual case. The panel for this case was made up of Elizabeth France CBE, John Swift QC, and Professor Amelia Fletcher OBE.
This investigation was opened in September 2016 and in May 2018 Ofgem issued a statement of objections, setting out its provisional findings. The parties then had opportunities to make written and oral representations on those provisional findings and on the amount of penalty.
Ofgem made a Procedural Officer Decision in May 2018 following an application for certain aspects of the investigation to be reviewed.
In January 2019, Economy Energy Trading Limited ceased to trade and entered into administration. Its customers were transferred to Ovo Energy under the supplier of last resort process operated by Ofgem.
A non-confidential version of the decision document will be published on Ofgem’s website as soon as possible.

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