CMA refines microbusiness measures

The Competition and Markets Authority is consulting on a measure to stop suppliers using high exit fees to lock microbusinesses into contracts.

The consultation will also discuss forcing suppliers to publish their prices so that microbusiness customers can get a better idea of their options and pricing.

The measure came as part of the final report from a two-year investigation into the market by the Competition and Markets Authority (CMA). The probe found that microbusinesses have been paying around £180 million a year more than they would in a more competitive market – with around 45 per cent on expensive default tariffs.

The CMA is already consulting on another measure which will require suppliers to provide Ofgem with information about both domestic and microbusiness customers (including their energy usage) who have been on a default tariff for more than 3 years. The database will allow suppliers to compete for these customers via post and could be rolled out nationally after small-scale pilots to start next year.

CMA energy market investigation chairman Roger Witcomb said: “The database remedy will bring cheaper price offers directly to those customers who have been paying too much for a long time. There are much better offers out there and we’re requiring the suppliers of those customers to make it easier for their competitors to get access to them.

“We’re also tackling problems that can lead to very small businesses paying more than they should. They will be able to see all the prices that are available to them, and will no longer be locked into the most expensive contracts.”

As well as these measures, the CMA is consulting on other draft orders including on a transitional price cap for prepayment meter customers.  Responses on the draft orders are invited by 18 November 2016.