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Anglian Water could be fined for anti-competitive behaviour relating to allegations that its pricing of a connection to the ‘Fairfield’ development in Milton Keynes in 2008 was unfair.
Last week Ofwat issued a notice as part of its continuing investigation into whether Anglian Water behaved in an anti-competitive way.
The investigation has been dogged by concern of a conflict of interest owing to the fact that current Ofwat chairman Jonson Cox was chief executive of Anglian Water at the time the alleged market abuse took place. The regulator said its rules ensure board members are not directly involved in cases where there is a potential conflict of interest.
The latest investigation notice follows an initial “statement of objections” issued by Ofwat in December 2011, in response to allegations the water company had exerted a margin squeeze on a competitor.
On Cox’s appointment to the Ofwat chair in 2012, concerns were raised over the potential conflict of interest in this case. The supplementary statement of objections gives notice of a proposed infringement decision under the Competition Act 1998 and means Anglian Water could be fined.
Ofwat said that Anglian’s pricing for the Fairfield site may have excluded competition and having reviewed the case, “still has significant concerns” in relation to the company’s pricing conduct.
The regulator says it will continue its investigation “though no assumption should be made at this stage that there has been an infringement of competition law”.
Philip Marsden, an independent director sitting on Ofwat’s board casework committee, said: “This is another step in the process of investigation before making a final decision. If there is anti-competitive behaviour in any sector it is customers who lose out. If competition rules have been broken, Ofwat will take action.”
An Anglian Water spokesman said: “We are fully committed to a competitive water industry, where all customers, both domestic and retail, have access to the highest quality of customer care and some of the best quality water and wastewater services anywhere in the world.”
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