Leader: The CMA could yet pack a punch

Before the month is out, we will know the Competition and Markets Authority’s final determinations on the remedies it wants to impose on energy market malfunctions.

We will also know – at almost precisely the same juncture – the result of the UK referendum on EU membership, and it will be interesting to see how the shadow of that defining moment for the nation impacts coverage of the CMA. Some would say it is just one of many factors that will lead to the fruit of almost two years’ labour on the part of the CMA being a “damp squib”.  

Sceptical commentators on the CMA’s progress have voiced a wide and sometimes contradictory range of reasons why this might be. Some argue that market players have moved faster to change the failings identified in their operations and their modes of customer engagement than the CMA has moved to produce remedies. They say, therefore, that these remedies are rendered irrelevant. Others would pour scorn on that, but say that the CMA has tied itself in knots trying to address engagement and has failed to come up with any kind of long-term or effective fix – the short-term introduction of price regulation and proposals to mandate sharing of customer data are seen as especially likely to produce their own “unintended consequences” for the customer experience.

But it is these controversial elements of the CMA’s proposals that could yet make the release of its findings a pivotal moment for the sector. In the pages of Utility Week this week, GB Energy Supply’s chief executive expresses his belief that the big six suppliers will “push back” on data sharing, and there have been rumours of legal challenges being prepared in anticipation of the CMA’s broader conclusions.

In the light of Ofgem chief executive Dermot Nolan’s recent comments that resistance to the CMA’s findings could force the regulator away from its preferred path favouring principles-based regulation and down a route of increased interventionism and price setting, these murmurings of discontent could see the CMA’s outcomes reassume their transformative potential – in a way the sector neither desires nor would have anticipated at the investigation’s outset.