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Energy firms hit with fines of over £800,000 for breaking competition law

Energy firms hit with fines of over £800,000 for breaking competition law

Two energy suppliers and a consultancy firm have been slapped with large fines by Ofgem after breaking competition law.

The energy regulator says that suppliers E and Economy Energy worked with energy software and consultancy company Dyball to ensure that the two firms did not target one another's customers through face-to-face sales.

As part of the agreement, the companies shared commercially sensitive information which could identify their customers via their meter details.

Why were the firms fined?

Ofgem fined E £650,000 and Economy Energy £200,000 – with the latter being a smaller fine due to Economy's weak financial position after recently entering administration – while Dyball was fined £20,000 for acting as a facilitator.

It says that the majority of the customers with E and Economy Energy at the time the law breach took place were prepayment meter customers, who are less likely to switch than those on standard meters and thus more likely to be on a more expensive deal.

And the regulator says the firms' agreement further damaged competition in the market because suppliers typically compete to attract new customers by offering them a better deal.

What does Ofgem say?

Anthony Pygram, director of conduct and enforcement at Ofgem, said: "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."

We've contacted the firms involved for comment and will update this story when we hear back.