After lobbying from the 'Big
Six' energy companies, who claimed the figure was
inaccurate, the CMA has changed its provisional conclusion that the
Big Six overcharged their customers by £1.7bn a year, instead
ruling that customers could have saved £1.4bn in a fully
The removal of the 'whole of
market' requirement on price comparison websites, so that
they need only display tariffs of suppliers who have paid
commission. Understandably, the smaller suppliers (who do not pay
commission to websites) are not happy with this.
The CMA has dropped its
recommendation that DECC finalise proposals for Contracts for
Difference budgets and the allocation of technologies to pots at
least one year ahead of an auction. DECC had objected to this,
saying it would have resulted in them setting a conservative budget
instead of having the flexibility to increase the budget closer to
the auction round, as happened in the last round.
For gas settlement, the CMA
recommends that Ofgem ensures the implementation of Project Nexus
by 1 February 2017 or as soon as possible after that date –
this timetable has slipped since the provisional remedies, which
proposed an implementation date of 1 October 2016.
A new secure database, operated by
Ofgem, containing details of customers who have been on their
energy supplier's default tariff for three years or longer,
which competing suppliers can use to contact them with cheaper
A price cap on prepayment tariffs,
which will remain in place until "...the introduction of
smart meters removes the limitations on such customers accessing
When the energy market investigation was initially announced,
the industry feared it would lead to a break up of the 'Big
Six' and the end of vertical integration, following a
series of major rises in energy bills in 2012 and 2013 and
Labour's call for a price freeze in summer 2014. However, the
CMA's investigation went on to focus on low consumer awareness
of their ability to switch suppliers (particularly amongst
consumers on standard variable tariffs and pre-payment meter
customers) and aspects of the regulatory framework, including
restrictions on the number of different tariffs that suppliers can
offer. In particular, the CMA noted that two Ofgem initiatives (the
'four tariff' rule and the prohibition on retail
price discrimination) contributed to low consumer engagement and
therefore needed to be addressed.
Interestingly, one of the CMA panel members (Martin Cave) did
not think that the remedies go far enough and suggested that a
"short-term price cap covering a substantially larger
number of customers" would "reset the
The CMA will shortly publish a timetable for the implementation
of the remedies package.
The UK's Competition and Markets Authority (CMA) is consulting on changes to the UK merger regime proposed to reduce the burden of investigations into mergers where the parties operate in small markets.
The UK Competition and Markets Authority ("CMA") has a duty to refer a transaction for an "in depth" phase 2 investigation in instances where it believes that there is a realistic prospect of a transaction resulting in a "substantial lessening of competition", subject to certain exceptions.
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