'Big Six' energy firms to face major competition inquiry
Energy regulator Ofgem has called for the "Big Six" gas and electricity providers to face a full-scale competition inquiry.
Ofgem: Inquiry should look at profits and customer trust
Ofgem has highlighted several key areas the Competition and Markets Authority should look at in its inquiry of the energy market, including possible tacit co-ordination and profits made by the 'Big Six'.
The energy watchdog has outlined the following areas:
- Customer trust: The review found that consumer trust had fallen with 43% of customers not trusting energy suppliers to be transparent with them.
- Entry barriers: The large suppliers own infrastructures such as power stations and supply businesses meaning it is difficult for new entrants to the market.
- Possible tacit co-ordination: Ofgem did not find evidence of explicit collusion between suppliers. However, the watchdog found evidence of possible tacit co-ordination in the timing and size of price announcements.
- Profits: The average profits for the 'Big Six' have increased from £3bn to £3.7bn in three years. Ofgem said it noted the increase and questioned suppliers saying that 5% is a fair margin.
-
Break-up threat to Big Six energy firms
Regulators have called for an investigation into the UK's Big Six energy suppliers amid soaring household bills and rocketing profits.
-
Centrica 'refutes totally' idea 'Big Six' are a cartel
Ofgem's finding that aspects of energy firms' behaviour "would appear to be consistent with tacit coordination" has been denied by Centrica.
-
Inquiry a significant moment but it will take two years
The inquiry into the 'Big Six' energy firms is a significant moment, but don't hold your breath, it will take the best part of two years.