Small energy suppliers slam CMA’s online comparison proposals

Customers who search for cheap energy deals online will only see tariffs from the Big Six suppliers under rules proposed by the competition watchdog. That’s according to six smaller independent […]

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By Priyanka Shrestha

Customers who search for cheap energy deals online will only see tariffs from the Big Six suppliers under rules proposed by the competition watchdog.

That’s according to six smaller independent providers, which fear the rules would “severely damage” competition in the energy market.

GB Energy Supply, Co-operative Energy, Bulb, Go Effortless Energy, So Energy and Zog Energy highlighted their concerns in a letter to Energy Secretary Amber Rudd.

They believe price comparison websites (PCWs) will only show deals that big energy companies have paid them to promote.

Their concerns come as the Competition and Markets Authority (CMA) recommended removing the limit on the number of tariffs and suggested PCWs should no longer have to show all available tariffs to consumers.

However they must make it clear whether they have received commission from energy firms whose offers were being recommended.

The suppliers are “profoundly concerned” since the proposals will lead to higher bills “as the commission charged by comparison sites is transferred straight to people’s bills”.

Luke Watson, Managing Director of GB Energy Supply, said: “The remedies the CMA is suggesting will have serious implications for suppliers outside the Big Six and for people’s bills. If there is no requirement on comparison sites to show every available tariff then many suppliers will have no choice but to pay their fees, which can be as much as £70 per dual fuel, a cost that will be passed onto the customers through their bills.

“Moneysupermarket and uSwitch dominate about 75% of the switching market and have good relationships with the Big Six. There is a real chance that the market power of the Comparison Two and Big Six will mean less competition and higher bills. The ability of small independent energy suppliers to enter the energy market is what has driven down the cost of energy by hundreds of pounds in the past 18 months. If the CMA remedies are crudely imposed by the government and Ofgem the market will be in no state to encourage more new entrants offering consistently good deals.”

Price comparison website uSwitch however claims the proposals “will incentivise sites to compete for exclusive deals with suppliers, boost competition and lower energy prices for consumers”.

DECC said it won’t be commenting before the CMA report has been published but reiterates that “it’s important that the CMA completes its investigation to ensure the energy market is competitive and effective for consumers”.

The CMA is expected to publish its final recommendations on remedies for the energy sector this month.