UK-based payment services provider PayPoint UK is facing legal action over alleged anti-competitive practices in the prepayment market
The company has been hit with a multimillion pund lawsuit from Global 365, a social enterprise that aims to help people struggling to pay their energy bills.
Global 365 claims that it has been "shut out of the market" when attempting to set up its smart energy prepayment service because of the exclusive arrangements in place between PayPoint and most of the energy suppliers in the UK.
Global 365 is consequently taking legal action to "recover significant loss and damage" from PayPoint due to the latter's abuse of its dominant market position and use of contract restrictons.
The UK's energy regulator Ofgem had provisionally ruled in 2021 that PayPoint had engaged in conduct intended to restrict other players in the prepayment market. This led PayPoint to make a £12.5m donation to Ofgem's voluntary redress fund and to voluntary agree to remove the clauses in question.
However, Global 365 has now launched its own law suit. "This claim seeks to restore Global 365 to the position that it would have been in had it not been wrongly kept out of the market," said Samantha Haigh, partner at Addleshaw Goddard, the legal firm representing Global 365..
"In being prevented from entering the market effectively in 2019, Global 365 has been unable to offer its services to the suppliers covering the majority of the market."