Fideres Study Believes UK Water Companies Potentially in Breach of Competition Law Over Raw Sewage Spills

Economic consultancy believes that water companies’ behaviour may amount to an abuse of competition laws that could entitle UK households to compensation

LONDON--(BUSINESS WIRE)--Today Fideres released new research into the potential harm suffered by UK consumers as a result of raw sewage spills over the past six years. Fideres found that the water companies’ conduct may constitute, from an economic perspective, an abuse of their dominant position as regulated monopolies. As such, consumers may be entitled to compensation under existing competition laws.

Fideres’s research finds that water and wastewater utility companies in England and Wales may have exploited their monopoly position and the inability of consumers to switch away by underinvesting and hence potentially providing an excessively low-quality service. In effect, this may constitute an excessive quality-adjusted price for the service they provide.

Over the past six years, Fideres argues that the privatised water companies’ inadequate capital investment appears to have resulted in approximately 120 million cubic metres of raw sewage being discharged each year onto our beaches and into our rivers. Enough to fill the Royal Albert Hall four times a day each year. These spillages ran for a combined 14,000 hours (the equivalent of there being an ongoing spillage every weekend of those six years). Of these discharges, approximately 10,300 are classed as pollution incidents that breach the minimum standards set out in the firm’s regulatory permits.

This potential conduct may damage the environment, people’s health and their quality of life. However, it also exploits households around the country, many of whom struggle to pay their bills to ensure the safe disposal of sewage only to find that these privatised utilities may have taken the money, made huge pay-outs to shareholders, while dumping the sewage without providing adequate treatment service in exchange.

Fideres’s economists find that, through the raw sewage spills, the water companies’ potential anti-competitive behaviour may have generated damages to consumers in the region of £163 million pounds, over the past six years.

In addition, Fideres estimated that water companies may have overcharged consumers approximately £1.1 billion, over the same period, for sewage treatment services which they did not provide since the raw sewage was spilt rather than treated.

Fideres has notified the Consumers and Markets Authority of this research and asked them to investigate the water companies’ conduct.

The full research is available at: https://fideres.com/our-research/

About Fideres

Fideres is an international economics consulting firm, specialized in investigating corporate misconduct, market manipulation and abuses since 2009. Fideres has developed a unique expertise in identifying breaches of competition laws and our proprietary work has led to the filing of over 15 class actions. More about the firm and its work at www.fideres.com. Follow the firm for updates and news at @Fideres.