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Anorak | Where Is The Evidence That The Power Companiers Are A Cartel?

Where Is The Evidence That The Power Companiers Are A Cartel?

by | 11th, November 2013

nPower bonuses THIS is an interesting call :

Paul Massara took to his personal Twitter account to vent his anger over the ‘cartel’ claims minutes after they were made by several MPs in the House of Commons.

“Lots of wild talk about cartels but no evidence and the facts don’t support. Where is the evidence ????” he wrote. “Put up or shut up.”

The interesting thing about it is that no one as yet has in fact presented any evidence showing that there is a cartel in action. All we’ve been told is that they all put their prices up at the same time so therefore they musty be.

Ah, but, sorry, it doesn’t actually work that way. The problem is that you’ll see prices moving in exactly the same way if it is a pure and competitive free market or a cartel. The patterns of change will be the same: everyone will be changing their prices in the same direction at roughly the same time.

In order to see whether you’ve got a cartel running you need to go and look at the returns to capital being made. That’s where the evidence would be: that the companies were making so called “supernormal”profits. That

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Posted: 11th, November 2013 | In: Money, News Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink