Ofgem issues statement of objections to PayPoint

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Ofgem has issued a statement of objections, under the Competition Act 1998 to PayPoint plc (“Paypoint”), a company that provides over-the-counter payment services to prepayment energy customers in the United Kingdom, alleging that this company breached competition law.

An Ofgem spokesperson commented: “At this stage of the investigation, our findings are provisional and no conclusion should be drawn that there has been an infringement of competition law at this stage.

“We will carefully consider any representations from the company before deciding whether the law has in fact been broken.”

The statement of objections alleges that:

  • PayPoint held a dominant position in the market for over-the-counter payment services for prepayment energy customers for at least the period running from April 2009 to October 2018; this meant that PayPoint had a special responsibility not to act in a way that would impair its rivals’ ability to compete.
  • PayPoint included exclusivity clauses in most of its contracts with energy suppliers and retailers, a practice that limited their ability to use rival services, thus excluded its competitors from the market.
  • These actions harmed competition to the detriment of consumers, and amounted to an abuse of a dominant position, which breaches Chapter II of the CA98 and/or Article 102 of the Treaty on the Functioning of the European Union (“TFEU”).

The case will be considered by Ofgem’s Enforcement Decision Panel in due course.