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(Alliance News) - UK regulator Ofgem on Wednesday said it has issued a statement of objection to PayPoint PLC alleging that the company breached competition law.
Shares in PayPoint were down 15% at 517.78 pence in London in morning trading.
PayPoint is based in Welwyn Garden City and provides over-the-counter payment services to UK prepayment energy customers. Ofgem's statement of objections alleges that PayPoint held a dominant position in the market for at least the period between April 2009 and October 2018.
As such, Ofgem said "PayPoint had a special responsibility not to act in a way that would impair its rivals' ability to compete".
However, the regulator said PayPoint included exclusivity clauses in the majority of its energy supplier and retailer contracts, limiting their ability to use rival services and excluding competitors.
"These actions harmed competition to the detriment of consumers, and amounted to an abuse of a dominant position," Ofgem said.
At present, Ofgem said its findings are provisional, meaning no conclusion should be drawn at this stage that PayPoint has breached competition law.
"We will carefully consider any representations from the company before deciding whether the law has in fact been broken," said Ofgem.
Ofgem's Enforcement Decision Panel will consider the case in due course.
By Anna Farley; annafarley@alliancenews.com
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