Gemserv agrees with the CMA findings that simply consolidating industry codes would not lead to a positive impact in support of competition. In our initial response, we explained how the sheer weight of market reform is overwhelming many supplier organisations, especially smaller organisations, and there was more that could be done to improve the code governance framework. In that regard, code consolidation of itself seemed to us to miss the root cause.
We also agree with the CMA on the importance of independence, whether this be with regard to Price Comparison Websites, Ofgem’s role, or code administrators – this is critical to securing trust in market practices.
However, it is via the delivery of effective competition, where the greatest benefits lie. As evidenced by the CMA2, there are risks attached to regulatory interventionist measures. The Retail Market Review (RMR) is an example where regulatory intervention has contributed to an Adverse Effect on Competition (AEC)3. Regulation should be a last resort i.e. where competition is (for whatever reason) incapable of delivering the desired outcomes. It is in that regard that Gemserv recommends the CMA consider whether improvements to the competitive market framework for code administration services would be a better option than directing more powers to Ofgem.