AS ONLINE ENERGY PRICE COMPARISON INTENSIFIES, INCUMBENTS RAISE THEIR DEFAULT RATES TO THOSE LESS DIGITALLY SAVVY TO SWITCH.
An empirical study of the German power market by ZEW Institute shows that an increase in consumer search through Internet intensifies the incumbent´s price discrimination: free market offers will follow the competitors´ but their baseline rates increase in order to compensate margins. How long this can last? Although in Germany default rates are not set by the regulator and this “margin buffer” may still exist for a while, the Federal Court of Justice last June already ruled against increases in default rates which are not properly justified and transparent. https://lnkd.in/dqV_npa