A recent meeting on competition in the water sector has flagged up the fact that relationships between the water companies may have to change  - culturally conversations that may have been acceptable beforehand, may be less acceptable in competitive markets.

This was one of the key messages from a panel of experts in the sector at a meeting of representatives from the incumbent water companies, as well as current and future retailers, which took place at the Competition and Markets Authority’s (CMA) London offices last month.

The event was organised to support Ofwat’s consultation on its updated guidance on its approach to competition law cases – the regulator is currently consulting on the issue until 20 January 2017

Cathryn Ross, Ofwat’s Chief Executive opened the event by setting out the context into which the refreshed guidance will be introduced as the sector goes through a period of significant change.

The delegates heard presentations from a range of speakers including:

• Rachel Merelie (Senior Director) from the CMA and Richard Khaldi (Senior Director) from Ofwat provided an overview of Ofwat’s proposed approach to enforcing competition law and the range of tools at its disposal, as well as how the CMA is working with Ofwat and the concurrent competition regulators;
• Ann Pope,  (Senior Director Anti-Trust) at the CMA, set out the approach to tackling a competition act case, from early intelligence through to the final decision, as well as thoughts on raising awareness of the Competition Act;
• Richard Whish,  Emeritus Professor, King’s College London spoke about recent developments in competition law and the potential issues the sector may face as further competition is introduced;
• Sheldon Mills (Senior Director) and Chris Jenkins  (Director) from the CMA Mergers team, closed the event by providing an overview of the CMA’s approach to assessing mergers in the water sector and the potential challenges that could cause them to reject a proposed merger.

Delegates also had the opportunity to pose questions to the panel of experts, who were quizzed on the likely causes of Competition Act breaches, as well as the range of tools available to both Ofwat and the sector to address potential issues now and the industry moves toward new markets in the sector.

One of the key messages from the panel was that relationships between companies may have to change with the approach to future markets. Culturally conversations that may have been acceptable beforehand, may be less acceptable in competitive markets.

The experts agreed that evolution toward more competitive markets, and being on the right side of competition law, was “not just a question of making a few structural changes and ticking the right boxes”  - it would also require “a cultural change in attitude and approach from the companies to ensure that the transition is successful.”