Wednesday, October 17, 2007
Introducing Competition and Deregulating the British Domestic Energy Markets: A Legal and Economic Discussion
Posted by D. Daniel Sokol
Energy deregulation is a hot topic in many jurisdictions. Michael Harker and Catherine Waddams of the University of East Anglia (Norwich Law School and School of Management respectively) analyze the British experience in this area in their paper Introducing Competition and Deregulating the British Domestic Energy Markets: A Legal and Economic Discussion.
ABSTRACT: In this article we chart the development of competition and deregulation of the British retail energy markets, explaining the evolution of competitive constraints when consumers are introduced to supplier choice for the first time. In the context of rising real energy prices for consumers, and continued market power on the part of incumbents, we address the question of whether the control of pricing practices through the ex post provisions of the general competition law is sufficient to protect consumers. We also explore the issue of whether reliance solely on these provisions is desirable given the uncertainty which surrounds the application of the Chapter II prohibition (governing abuse of dominance), specifically in respect of price discrimination in final markets. We conclude that the outcome of the liberalisation experiment in terms of delivering benefits for consumers is unclear.