Energy regulator Ofgem has alleged that suppliers E (Gas and Electricity) and Economy Energy breached competition law through an anti-competitive agreement in place for at least nine months during 2016.
According to the regulator, the two energy providers - which mainly supply the prepayment market - agreed not to target each other’s customers, and shared sensitive data in order to facilitate this.
Ofgem also alleges that consultancy firm Dyball Associates - which provides software and consultancy services to the UK electricity and gas markets - provided the systems that allowed customer data to be shared and blocked switching between the suppliers.
The allegations – which cover a period between at least January and September 2016 - were announced in the regulator's 'statement of objections', which lays out its provisional decision in its investigation.
Ofgem notes that it has not yet concluded that there has been a breach of competition law, and Economy Energy, E and Dyball Associates will now have the chance to respond to the allegations.
Both suppliers have fallen foul of Ofgem in the past, with Economy Energy currently under investigation over whether its marketing and telesales practices broke the rules, while E was fined £260,000 in November last year over misleading sales practices.
What are the allegations?
In its provisional decision, Ofgem alleges that:
- Between at least January and September 2016, Economy Energy, E and Dyball Associates had an agreement preventing the two suppliers actively targeting each other's customers through face-to-face sales.
- Economy Energy and E shared commercially sensitive information in the form of details about their current customers
- Dyball Associates provided the systems that allowed customer lists to be shared, and recruitment of the two energy firms customers to be blocked.
What does Economy Energy and E say?
A spokesperson for Economy Energy said: "Economy Energy Trading Limited and Economy Energy Holdings Limited ("Economy Energy") note the announcement of today's date by the Gas and Electricity Marketing Authority ("Ofgem") that it has issued a statement of objections under the Competition Act 1998 in relation to an investigation of two energy suppliers, including Economy Energy, and a consultancy firm.
"As acknowledged by Ofgem, the statement of objections is not a finding of infringement of competition law and no such findings have been made at this stage.
"Economy Energy takes its compliance obligations very seriously and is disappointed by Ofgem's announcement. The company is presently reviewing the statement of objections and proposes to submit a robust defence to Ofgem's allegations through the proper channels in due course."
We also contacted E, but we've yet to hear to back.