Shares in Paypoint fell by 17 per cent yesterday after the energy regulator alleged that it had breached competition law by excluding rivals from the market for a decade.
The company operates 27,000 over-the-counter payment facilities that are used to top up prepayment gas and electricity meters, typically located in newsagents or local supermarkets.
Ofgem alleged that Paypoint abused its position to make energy suppliers and shops sign exclusivity deals between April 2009 and October 2018, stipulating their customers could only use its facilities, and thereby blocked competitors. Paypoint’s actions “harmed competition to the detriment of consumers”, Ofgem said, suggesting that its customers — who are disproportionately likely to be poor or vulnerable households — may have ended up paying more than necessary as a result.
Paypoint reported a pre-tax profit of £57 million on revenues of £213 million in the year to the end of March.
Ofgem, which can impose fines of up to 10 per cent of a company’s applicable turnover in the event of a breach, said it had issued a statement of objections under the Competition Act.
Paypoint said it was “considering Ofgem’s provisional views set out in the statement of objections and will exercise its right to respond to Ofgem and present its case”.
“In the event that Ofgem were to proceed to an infringement finding, this could impact the Issuer’s ability to enter into such exclusive arrangements with energy suppliers, and rely on the exclusivity provisions in existing agreements,” it said.