On 21 January 2015, Ofgem, the UK energy regulator, announced that it was investigating Scottish and Southern Energy (SSE) to determine whether the provider had abused a dominant position and put its competitors at a disadvantage in the electricity connections market.
What is special about this particular investigation is that SSE are being investigated for an abuse of dominance under Article 102 of the TFEU, that being a competition law offence, rather than the normal route of market participants being dealt with through the regulator’s own powers. A common complaint is that whilst many regulators were granted concurrent powers to the Competition and Markets Authority in being able to fine companies and enforce competition law, regulators have hardly done so and continue to rely on their ex ante regulatory powers to discipline practices.
In fact, concurrent regulators have a duty to consider whether it is appropriate to uses their Competition Act 1998 powers before resorting to the use of their ex ante powers under Schedule 14 of the Enterprise and Regulatory Reform Act 2013. There has been little evidence that concurrent regulators have wholeheartedly embraced this approach.
The danger of this lack of competition law enforcement is that it means many perpetrators are coming off lightly without being prosecuted and fined, competition law is failing to fully develop due to a lack of precedent and consumers and end users are disadvantaged as they cannot bring damages claims based on an enforcement action by a regulator.
SSE have only been accused in the present case and no finding of liability has been made.
It is hoped that a more disciplined approach will be adopted by other regulators when considering the use of their competition law powers.
Ofgem’s announcement may be found here.