UK-based payment services provider PayPoint UK is facing legal action over alleged anti-competitive practices in the prepayment market. The company has received a multimillion-pound lawsuit from Global 365, a social enterprise dedicated to aiding individuals struggling with energy bill payments.
Global 365 asserts that it has been “shut out of the market” while trying to establish its smart energy prepayment service, citing exclusive agreements between PayPoint and most UK energy suppliers as a barrier. As a result, Global 365 is seeking legal recourse to “recover significant loss and damage” stemming from what it describes as PayPoint’s abuse of its dominant market position and restrictive contracts.
In 2021, the UK’s energy regulator Ofgem provisionally determined that PayPoint had engaged in conduct aimed at limiting competition in the prepayment market. This ruling led PayPoint to contribute £12.5 million to Ofgem’s voluntary redress fund and to agree to remove the problematic contract clauses.
Despite this, Global 365 has initiated its own lawsuit. “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,” stated Samantha Haigh, a partner at Addleshaw Goddard, which is representing Global 365. “By being prevented from effectively entering the market in 2019, Global 365 has been unable to offer its services to the suppliers that dominate the market.”