Formal investigation under the Competition Act 1998 concerning the price and non-price terms Bristol Water applies when providing services to self-lay organisations
| Date | 31 March 2021 |
If customers’ need a new connection to the water and/or wastewater network they have a choice about who provides it. It can be provided by the local monopoly water company, a new appointee or an accredited self-lay provider (SLP). SLPs are contractors who work in the market for providing new connections. They typically provide developers with water supply infrastructure which the local water and/or wastewater company then adopts, taking responsibility for the assets and using them to provide serves to end-user customers.
Water companies provide contestable services, where they compete with new appointees and SLPs, and also non-contestable services, where they are the monopoly provider. For these non-contestable services, the water company effectively provides these to itself to enable those contestable services against which it competes with new appointees and SLPs. In practice both the contestable and non-contestable services are often provided by the same part of the water company’s organisation (developer services).
In March 2013, we received complaints from two SLPs alleging that Bristol Water was abusing its dominant position as a monopoly water company appointed under the Water Industry Act 1991. These complaints raised concerns that Bristol Water may have been offering non-contestable services to SLPs on different terms to its own developer services business. The two SLPs thought this meant that developer customers would always find Bristol Water’s developer services more attractive. As a result, they felt that they and other SLPs were unable to compete fairly with Bristol Water in its area.
In March 2013, we launched an investigation as we considered there were reasonable grounds for suspecting Bristol Water had infringed the Competition Act 1998 (CA98) by abusing its dominant position. We identified a number of competition concerns related to Bristol Water’s behaviour that could potentially restrict entry and expansion of competitors in the new water connections market in Bristol Water’s area. These competition concerns were:
- Bristol Water potentially using its dominant position in non-contestable services to harm effective competition for contestable services.
- Bristol Water treating costs differently in calculating quotes for self-lay and requisitions. This can result in customers perceiving that requisition from Bristol Water was cheaper than the self-lay option offered by SLPs.
- Bristol Water requiring SLPs to pay...
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