Two energy firms have been named and shamed by a regulator for breaching competition laws.
Ofgem said it has fined E (Gas and Electricity) Limited, Economy Energy, and energy software service, Dyball Associates, £870,000 for breaking industry rules.
Between January and September 2016, the three firms had an anti-competitive agreement preventing the two suppliers from actively targeting one another’s customers through face-to-face sales.
To facilitate this agreement, the suppliers shared commercially sensitive information in the form of customer meter point details.
Dyball Associates enabled this arrangement by designing, implementing and maintaining software systems that allowed customer meter point details to be shared, and recruitment of each other’s customers to be blocked.
The majority of the customers with both suppliers at the time were pre-payment meter customers, who were less likely to switch than those on standard meters and therefore more likely to be on a more expensive deal.
E (Gas and Electricity) and Economy Energy put forward an argument that they were a combined family enterprise, however this was rejected by Ofgem.
It said the agreement undermined competition in a market where suppliers typically compete to attract new consumers by offering them a better deal.
Ofgem has fined E (Gas and Electricity) £650,000 and Economy Energy £200,000 (the latter fine reflecting Economy Energy’s financial position, including that it is in administration).
Ofgem has fined Dyball Associates £20,000 for acting as a facilitator.
Anthony Pygram, director of conduct and enforcement at Ofgem, said: "Anti-competitive agreements are a serious breach of competition law and could cause widespread detriment and harm to consumers, especially those in vulnerable situations.
"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."
