Plans by SSE and Innogy to merge their UK domestic retail businesses warrants further scrutiny, says the Competition and Markets Authority (CMA).
The watchdog has concluded phase one of its investigation and is concerned that reducing the ‘big six’ to a ‘big five’ might harm price competition.
“We know that competition in the energy market does not work as well as it might. However, competition between energy companies gives them a reason to keep prices down,” said Rachel Merelie, senior director at the CMA.
“We have found that the proposed merger between SSE Retail and Npower could reduce this competition, and so lead to higher prices for some customers. We therefore believe that this merger warrants further in-depth scrutiny.”
The firms have until 3 May to offer measures to address the CMA’s concerns or the CMA will refer the merger for a phase two investigation.