Small energy suppliers vent online comparison fears

By Joe Lynam
BBC Business Reporter


Independent energy companies want consumers to be able to see all available tariffs when using price comparison websites.

Six smaller providers fear that only gas and electricity deals from the "Big Six" will show up in searches under proposed new Competition and Markets Authority rules.

They fear that such a move would discourage competition.

The CMA proposals follow the watchdog's energy market review earlier this year.

Consumers can provide basic details to price comparison websites, which then provide what they believe to be the best options.

Sometimes these websites allow consumers to switch immediately, but it was often not clear that they only showed options for firms that have paid the site a commission or fee.

Following the CMA's investigation into the energy market, the watchdog published its initial recommendations for ways to encourage consumers to switch energy suppliers more often.

It concluded that price comparison websites such as Uswitch, Energyhelpline or Go Compare should no longer have to show all available energy offers.

However, it did find that such sites should make it clear whether they received a commission from the energy firms whose offers were being recommended.

The CMA believed the ability to switch energy suppliers online without delay might lead to a rise in instant switching, helping to drive down prices.

'Deeply worried'

Smaller independent suppliers have rejected this analysis, which is out for consultation.

"We are deeply worried about the lack of transparency in the proposed system," according to a letter to the Energy Secretary, Amber Rudd, signed by the chief executives of GB Energy Supply, COOP Energy, Go Effortless Energy, Bulb, So Energy & Zog Energy.

image copyrightGetty Images
image captionSix small energy providers have written to Amber Rudd

"Millions of people go to price comparison websites believing them to be transparent shop windows for the cheapest prices rather than 'brokers' in an increasingly skewed market."

The independent suppliers said that removing the obligation to show all tariffs would mean price comparison sites would end up only showing offers from the Big Six suppliers who had paid a fee.

The six smaller suppliers called on the Government to think again about the "serious ramifications".

However, the UK's third-largest price comparison website, uSwitch, disagreed.

"Price comparison websites offer a cost-effective way for energy suppliers to advertise their products and acquire customers," a spokesperson said. The site claimed to have saved consumers £112m on their energy bills in 2014.

"The CMA's package of proposals will incentivise sites to compete for exclusive deals with suppliers, boost competition and lower energy prices for consumers."

More options

The CMA is set to publish its final recommendations on remedies for the energy sector before the end of June.

The Government said that before it came to power in 2010, there were just 13 energy suppliers, with independents accounting for only 1% of the market.

The Department for Energy said there were now more than 40 providers, with smaller firms making up 15% of the dual fuel market.

A spokesperson said the government wanted a "competitive and effective energy market" that worked for consumers: "We are taking action to ensure bill payers get a fair deal, by making switching quicker and easier, ensuring the swift roll-out of smart meters and increasing competition in the energy market."

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