Investigation into whether Thames Water is contravening the Competition Act 1998

Case summary: updated 25 May 2021

On 21 June 2019, we opened an investigation into allegations that Thames Water Utilities Limited has contravened the prohibition in Chapter II of the Competition Act 1998 (“CA98”) by abusing a dominant position. The allegations relate to:

  • the approach that Thames Water has taken when installing digital smart meters and the impact that this has had on providers of data logging services and their customers
  • the accuracy of the data about customers that Thames Water made available to retailers at the time of the opening of the business retail market
  • the fairness of certain contractual credit terms that Thames Water applies to retailers

As part of our on-going analysis we keep under review which of our regulatory tools are most appropriate to each of the issues being considered.

In June 2020 we concluded that the CA98 was no longer the most appropriate tool to use in relation to the allegation about contractual credit terms and that the issue could be more effectively considered using our powers under sections 66DA and 117F of the Water Industry Act 1991 in relation to compliance with the Wholesale Retail Code. We therefore split this out into a separate investigation.

In November 2020 we decided that the CA98 is no longer the most appropriate tool for us to consider and address the concerns identified relating to the data accuracy issue. We consider that the issue could be more completely and effectively addressed using our powers under sections 18-22A, 66DA and 117F of the Water Industry Act, relating to compliance with Thames Water’s Licence and the Wholesale Retail Code. We have therefore split this out into a separate investigation.

We continued to progress the metering strand of our investigation under the CA98 and held a number of meetings with Thames Water to discuss our outstanding competition concerns.

Following these discussions,  Thames Water decided to offer us formal CA98 commitments for the purposes of addressing our competition concerns in this investigation.

Specifically, the commitments seek to address our concerns that, as a result of the approach Thames Water has chosen for rolling out its smart metering programme:

  • retailers and third-party service providers are unable to directly access water usage data from the smart meters; and
  • Thames Water has not, as an alternative to that direct access, provided access to the water usage data gathered via the new smart meters on fair, reasonable and non-discriminatory terms.

The commitments also seek to address our concerns that Thames Water has failed to have sufficient regard to the impact of its infrastructure investment decisions as a monopoly operator of a water supply system on related markets.

We are proposing to accept the commitments offered by Thames Water. Accepting the Commitments would result in the closure of our investigation, with no decision being made on whether the Chapter II prohibition has been infringed by Thames Water.

Next Steps

We are inviting interested parties to provide comments on the commitments. We will take any representations received into account before making a final decision on whether to accept them. The closing date for comment is Tuesday, 22 June 2021.

Date opened

21 June 2019

Relevant powers

Chapter II of the Act

Status

Open

Process

We opened this case after carrying out a preliminary assessment of the complaint and having given consideration to our prioritisation principles.

We have sought and obtained agreement from the Competition and Markets Authority that it is appropriate for us to exercise our concurrent functions under the Act to investigate the allegations.

We will gather information from a number of parties and assess this with a view to identifying whether Thames Water has abused a dominant position.

Further details on the processes that we will follow can be found in our guidance on the application of the Act to the water and wastewater sector.

Enquiries

If you have a query about this case, please email: [email protected]

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