The latest development in the Ontario water heater rental saga, the Competition Bureau has announced that it has reached an agreement with Direct Energy Marketing Limited that will both penalize past abuses of market dominance and allay the Bureau’s concerns surrounding potential market re-entry.
Direct Energy has agreed to pay an administrative penalty of $1 million, and has made a commitment to the Bureau to establish and maintain a corporate compliance program in the event that the company re-enters the Ontario water heater rental market in the next 10 years.
The Bureau alleged that Direct Energy engaged in anti-competitive conduct, including adopting product return policies designed to make it difficult for existing customers to terminate their water heater rental agreement. The Bureau found that consumers were effectively prevented from purchasing a new water heater or switching to a competing provider.
The agreement follows a ruling made by the Competition Tribunal in December 2014 permitting the Commissioner to pursue an order against Direct Energy for past conduct in the water heater rental market, despite the fact that Direct Energy exited the market in 2014. You can read our firm’s analysis of the decision here.
According to the Bureau’s press release, the investigation into allegedly deceptive door-to-door marketing practices by other water heater providers continues.