EC investigates British Gas Goldfish card

The European Commission has launched an investigation into the Goldfish credit card, British Gas's attempt to break into the financial services industry in partnership with HFC Bank.

News of the investigation into Goldfish, which gives money off gas bills for each pound spent using the card, emerged as Ofgas, the industry watchdog, issued a consultation paper on the venture. Ofgas had been informally investigating Goldfish since its launch last September, but yesterday requested formal responses from the industry on whether the card was anti- competitive in helping British Gas Trading (BGT), the supply division of Centrica, to hold on to its domestic customer base.

European Commission officials wrote to rival gas and financial services companies requesting views on Goldfish earlier this month. In an unusual twist the investigation was instigated by Goldbrand Development, the joint venture company set up by BGT and HFC to operate the card, apparently as a pre-emptive measure under European competition rules which prohibit cartel arrangements. By initiating the investigation itself, Goldbrand could not be fined if the card turned out to be anti-competitive, whereas, had a rival registered a formal complaint, the company could be open to financial penalties.

A Goldbrand spokesman played down the investigation: "This is just a standard procedure." However, several independent gas suppliers have already used the opportunity to complain to the Commission, which has the power to order changes to the card or ban it.

One independent gas group, which did not want to be named, said: "BGT are obviously worried about it and they are trying to protect their position. This is a bit of a gamble. They have a monopoly in most of the country and they are trying to lock in credit-worthy customers for when domestic competition arrives next year."

Goldfish has been heavily promoted by Centrica with a television and press advertising campaign which has so far netted 350,000 customers. For every pounds 100 spent using the card, customers get pounds 1 off gas bills, up to a maximum saving of pounds 75. The card is a central plank in Centrica's drive to diversify from gas into financial services and a broader energy portfolio including electricity.

Since the launch of Goldfish several partners had joined the scheme, including the Asda supermarket chain and the Boots retail group. Ofgas said an attempt by at least one rival gas company to join the card had been turned down.

Independent suppliers had doubted whether Clare Spottiswoode, the gas regulator, had the jurisdiction to investigate Goldfish because she has no powers under the Financial Services Act. She has used anti-discrimination powers, because gas customers who fail credit-worthiness tests would be rejected.