New Consumer Watchdog CMA Goes On The Prowl
Britons now have a new consumer watchdog responsible for ensuring value for money across a wide range of industries.
The Competition and Markets Authority (CMA) has become the UK's primary competition and consumer agency, bringing together the Competition Commission and the Office of Fair Trading.
The CMA is responsible for competition in the energy, banking, payday lending and higher education sectors.
Its chief executive, Alex Chisholm, told Sky News: "There are some markets where we feel there isn't the kind of intense rivalry that you would like to see among firms, or ones where people are exploiting consumers.
"Those are the ones we need to focus on to get firms competing properly, to make sure people are really serving the consumer, because the consumer is sovereign."
The CMA will prioritise reform in the energy market ahead of financial services industry reform - if energy regulator Ofgem recommends a full market investigation in the coming weeks.
"Confidence is really essential, and if you look at energy there has been a real collapse in confidence and trust," Mr Chisholm said.
Surveys show energy is the least-trusted industry, even more so than banking following the financial collapse in 2008.
Last week, Ofgem published a report criticising the excess profits and tacit collaboration by the big power firms.
The CMA has not decided yet whether the 5% profit margin made by energy companies is fair or not, but Mr Chisholm noted reports citing a 3% margin as "a reasonable return".
He added there were "worrying indicators" of collusion by the biggest energy firms to raise prices that do not reflect increases in the businesses' costs.
"When the underlying costs go up, you tend to see retail prices go up very quickly, like a rocket," he said.
The energy companies have blamed the increasing cost of buying oil and gas on the global markets for price hikes.
These costs have decreased 10% in the past nine months, he added.
"When wholesale costs go down, they seem to fall like a feather," Mr Chisholm said.
He said competition in the energy market is working at a midway level of what is achievable, leaving room for significant improvement in competitive behaviour.
But any significant reform in the energy market could take three or four years to complete, and would follow an initial 18-month review into the business.
Mr Chisholm added: "It's more important to get it right than to come up with a quick fix."
Using civil and criminal powers, the CMA can now levy fines running into the tens of millions of pounds, break up monopoly companies by forcing them to sell off business divisions.
It can also crack any industry price-rigging cartels it uncovers, as well as launch criminal cases that may lead to jail terms for convicted offenders.