Big Six energy firms may face break up as competition inquiry announced

Energy regulator Ofgem has said that the Big Six energy firms will undergo a competition investigation to find out “once and for all” whether rising prices are due to lack of effective competition in the energy market.

The investigation, which will be conducted by the Competition and Markets Authority (CMA), is expected to take 18 months.

The Big Six – SSE, Centrica, EDF Energy, E.ON, Scottish Power and RWE npower – currently account for 95% of the energy market in the UK.

The inquiry will examine whether the energy providers should be broken up into separate retail and energy generation businesses.

The Ofgem report said that consumer trust had dropped off, and that there was no clear evidence the companies had tried to lower costs while bills quadrupled in less than three years. However, the report does not accuse the firms of collusion, but suggests “possible tacit co-ordination” on the size and timing of price rises.

“Profit increases and recent price rises have intensified public distrust of suppliers and highlight the need for a market investigation to clear the air,” it said.

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