We don’t know much about why Ofgem decided to investigate the big six and the Energy Retail Association and the Association of Energy Suppliers for entering into an agreement to stop third-party intermediaries from face-to-face marketing. It has refused to disclose or comment on the results of the aborted two-year investigation. What we do know is that under the Competition Act, Ofgem must have had “reasonable suspicion” of a breach of competition law.
The third-party intermediary (TPI), or broker, market itself is no vale of innocence. In fact, many of the energy suppliers are drawing up codes for any TPIs that trade in their name – a protocol that is becoming all the more important in light of the mis-selling accusations that have dogged the sector.
There will doubtless be two sides to this story – but that’s not the point. The evidence for and against the big six and the TPIs should see the light of day. What “administrative priority” could possibly be more important than assessing whether the six companies that have a stranglehold on the UK market have been acting as a cartel, albeit in a small corner of the market?
Ofgem has already drawn widespread criticism for its failure to refer the energy supplier market to the Competition Commission. The abandonment of this investigation and refusal to reveal its findings add weight to the accusation that it is a regulator without teeth, and give its critics more ammunition to use against it.
Ellen Bennett
This article first appeared in Utility Week’s print edition of 19th July 2013.
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