Tuesday 8 November 2016

Ofgem accepts commitments from SSE

Ofgem has accepted binding commitments from energy supplier SSE to address concerns that it may have abused its dominant position in the electricity connections market. 
The commitments conclude a two year investigation where Ofgem provisionally noted that SSE was likely to hold a dominant position in the markets for non-contestable connection services for connections to its own networks.  Ofgem had concerns that by providing connections to independent network operators or independent connections providers on terms that were different to those that it offered to its own subsidiaries it would place those rivals at a competitive disadvantage.
SSE has committed to an overhaul of its pricing policies and internal restructuring to reduce the risks of anti-competitive conduct in the future. It will also conduct regular compliance reviews which will be externally audited.
As a result of accepting these commitments Ofgem will not reach a formal view on whether or not SSE has committed an infringement of competition law.  SSE must implement the remedies by 3 May 2017, being six months from Ofgem’s acceptance of the commitments.
According to SSE, the commitments will require it to make substantial changes within its operations although they probably fall short of what competitors were hoping for. 

The commitments echo similar themes to those raised in competition investigations in the energy sector by the European Commission, where the vast majority of cases have been resolved using commitments under Article 9 of Regulation 1/2003.

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