The use of data by companies to offer cheap deals to some customers while overcharging others is to be reviewed and the worst utility providers named on scorecards under Government plans to better protect consumers.
Business Secretary Greg Clark said companies too often used consumer data to identify loyal customers and allow them to default on to expensive deals as he revealed a package of proposals in the Modernising Consumer Markets green paper.
The Government wants to end this "information asymmetry" so that consumers can use their own data to get the best deals and drive competition, he said.
It will also explore how to help households with costs by developing performance scorecards to hold regulated companies to account if they fail their customers.
Consumers' access to alternative dispute resolution services will be improved to avoid costly court hearings, and a set of principles to improve the service that vulnerable consumers, including those with mental health issues, can expect to receive will be drawn up under the plans.
Further proposals include working with businesses to give consumers simple understandable terms and conditions and cracking down on scams.
The paper said competition was central to the modern consumer market, new technology should work in favour of the customer and consumers should be able to get redress when things go wrong.
It would also review competition rules to ensure they enable "quick, fair and effective enforcement" and create markets "that work well for everyone" and consider how the Government and regulators could work together to improve consumer outcomes in essential services.
It said Andrew Tyrie, the former chairman of the Treasury Select Committee and the commission which oversaw the separation of the high-risk activities of UK banks from their core personal and business lending activities, had been nominated as chairman of the Competition and Markets Authority (CMA).
A new "strategic steer" for the CMA has also been published for consultation "emphasising the place consumers have at the heart of the CMA's mission".
Mr Clark said: "The way we live as consumers is being transformed, powered by new products, technologies and data, and we want to ensure consumers are benefiting from this revolution.
"The UK led the world in creating innovative approaches to regulation and competition and it is right we look to upgrade the powers and rights we give our consumers to make it easier for them to get the best deal and fair compensation when things go wrong.
"Today's proposals are an important step in the Industrial Strategy's aim of building stronger, fairer markets that work for everyone."
Mr Tyrie said: "Making markets work for the benefit of millions of people is what the CMA is all about.
"In the years ahead, competition can and should be put even closer to the centre of British economic life, reaching to every sector, rooting out monopoly and unfair trading practices, and enhancing Britain's global competitiveness into the bargain."
The consultation will run for 12 weeks.