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Have energy price comparison sites breached the Competition Act?

Posted by Gabby Mallett on 24 June 2016 at 11:05 am

The Competition and Markets Authority (CMA) has been asked to investigate a suspected breach of competition law by some price comparison websites which offer energy tariff comparisons. This breach related to paid for online search advertising.

An investigation was first initiated by Ofgem, but in what The Guardian refers to as a ‘bizarre twist’ it has now been moved to the CMA.  Ofgem explains that it ‘procured search advertising during the period under investigation in the course of publishing advice and information to promote the interests of consumers’ which is one of its statutory functions, but this may then have had implications for the investigation as it may have been considered to call into question their impartiality.  Therefore they decided to move the investigation to the CMA.

Ofgem explains that the purpose of the investigation is ‘to determine whether the parties under investigation have breached the Competition Act by agreeing behaviour relating to online keyword search advertising’.  The implication is that the sites have deliberately colluded to not compete for certain search terms for some online deals.

The CMA is already investigating wider energy markets, with its report due this week.  They currently say that they have not reached a view as to whether there is sufficient evidence of an infringement of competition law in this case for it to issue a statement of objections to any of the parties under investigation.  They will now fully consider this issue and expect and an initial decision as to whether to proceed with the investigation or close it to be made in August.

And what does this all tell us….It tells us - don’t believe everything you read.  Of course use price comparison websites (note that the ones involved weren’t named), but do be wary that some deals, perhaps even better deals, may be available elsewhere.

And here’s another little tip.  If you submit actual meter readings you won’t keep getting estimated bills and you will know exactly how much energy you use on a regular basis and this will make any price comparison as accurate as possible.

Photo Credit: Kaleb Fulgham via Compfight cc

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