The Competition and Markets Authority (CMA) is to investigate the relationships between providers and one price comparison website following the publication of its Digital Comparison Tools (DCT) Market Study.
The organisation has opened a competition law investigation to examine one aggregator’s contract with home insurers which it stated “limit insurers’ ability to charge a lower price on one platform than on another” with regard to wide price parity/most favoured nation clauses (MFN).
The regulator committed to taking “enforcement action where necessary” to ensure effective competition.
“But we have also found that improvements are needed to help people get even better deals. We have set out ground rules for how sites should behave, as well as being clear on how regulators can ensure people have a better experience online.”
The CEO added: “We are also taking enforcement action where we suspect the law may have been broken.”
Despite the follow-up investigation, overall the picture from the market study was broadly “positive”.
In terms of pricing the CMA noted that it had heard concerns that price comparison sites “have led to the hollowing out of products, that is, a decrease in quality (eg worse insurance cover) because of an undue focus on price”.
The regulator stated that the evidence found by the study did not suggest a “harmful hollowing out”, however, it did raise issues with presentation of excess in insurance and suggested more could be done with quality metrics, both in terms of their content and the ways in which they are presented to support effective comparisons.
The report made a number of recommendations for the effective operation of aggregators.
The main recommendations from CMA’s final report include:
All sites should follow our ground rules. They should be Clear, Accurate, Responsible and Easy to use (CARE)
All sites should be clear about how they make money; how many deals they’re displaying and how they are ordering the results
Sites should be clear on how they protect personal information and how people can control its use
It should be made as easy as possible for people to make effective comparisons or use different sites, for example through better information about products.
All regulators with a stake in this area should work together to ensure people are well protected