ComparetheMarket fined £17.9m over competition law breach

Price comparison site ComparetheMarket has been fined £17.9m by the competition watchdog for keeping home insurance costs artificially high.

The Competition and Markets Authority (CMA) said that over a two-year period the firm's contracts stopped insurers advertising more cheaply elsewhere.

It meant getting the cheapest possible deal was not as "simples" for consumers as the company's adverts suggest.

But the firm hit out at the ruling, saying it "fundamentally" disagreed.

The CMA said clauses in contracts between December 2015 and December 2017 prohibited home insurers from offering lower prices on other comparison websites, and prevented these other platforms from expanding.

The competition watchdog found that this was likely to have resulted in higher insurance premiums for consumers.

But, in a strongly-worded statement, ComparetheMarket - part of the BGL Group - said it was disappointed with the CMA's decision and did not recognise its analysis of the market.

"We fundamentally disagree with the conclusions the CMA has drawn and will be carefully examining the detailed rationale behind the decision and considering all of our options." a spokesman said.

'Limiting bargains'

ComparetheMarket is one of the UK's biggest price comparison websites and well-known for its adverts featuring meerkat puppets and their "simples" catchphrase.

"Price comparison websites are excellent for consumers. They promote competition between providers, offer choice for customers, and make it easier for consumers to find the best bargains," said Michael Grenfell, executive director of enforcement at the CMA.

"It is therefore unacceptable that ComparetheMarket, which has been the largest price comparison site for home insurance for several years, used clauses in its contracts that restricted home insurers from offering bigger discounts on competing websites - so limiting the bargains potentially available to consumers."

The CMA concluded that:

  • The insurers bound by the contracts were prohibited from offering cheaper deals on other price comparison websites

  • Rival comparison sites could not offer lower prices, for example, by lowering their commission fees to encourage insurers to quote lower prices on their platforms

  • Without the clauses, ComparetheMarket itself would have had to compete harder to get lower prices from the home insurers

Mr Grenfell told BBC Radio 4's Today programme that the contract clauses meant many of the benefits of shopping around were lost for consumers, pointing out that the harm to competition was "more than theoretical".

"We show that it had real anti-competitive effects, that there were cases where insurance companies wanted to offer promotions or discounts on other websites, and they were prevented from doing so as a result of the clauses," he said.

The company has the right to legally challenge the ruling, which came at the end of a three-year investigation.

An investigation by consumers' association Which? in 2018 concluded that some price comparison websites offering car insurance policies were riddled with errors.

It said millions of consumers were "not getting a clear picture from the websites they visit".

Experts suggest consumers search on more than one price comparison website when buying utilities, financial products, and services.

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