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Introducing Competition and Deregulating the British Domestic Energy Markets: a Legal and Economic Discussion

Author

Listed:
  • Michael Harker

    () (Centre for Competition Policy, University of East Anglia)

  • Catherine Waddams Price

    () (Centre for Competition Policy, University of East Anglia)

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 the 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.

Suggested Citation

  • Michael Harker & Catherine Waddams Price, 2006. "Introducing Competition and Deregulating the British Domestic Energy Markets: a Legal and Economic Discussion," Working Papers 06-20, Centre for Competition Policy, University of East Anglia.
  • Handle: RePEc:ccp:wpaper:wp06-20
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    File URL: http://www.ccp.uea.ac.uk/publicfiles/workingpapers/CCP06-20.pdf
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    More about this item

    Keywords

    Energy markets; deregulation; monopoly; competition; dominance; market power; consumer switching; switching behaviour; price rebalancing; ex post and ex ante regulation;

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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