Competition and Markets Authority has issued ComparetheMarket a “statement of objections”
The Competition and Markets Authority (CMA) has investigated contract clauses used by the comparison website ComparetheMarket. The contracts stop home insurers from quoting lower prices on rival sites and other channels.
After reviewing the evidence, the CMA has provisionally found that these so-called “most favoured nation” clauses could be causing customers to miss out on better home insurance deals.
This is because the clauses prevent rival comparison sites offering cheaper prices than ComparetheMarket.
It also means home insurance companies are more likely to pay higher commission rates to comparison sites with the extra costs potentially being passed on to customers.
As a result, people buying home insurance could be missing out on cheaper premiums.
Nearly two thirds of new policies are found online
CMA Chief Executive, Andrea Coscelli, said:
“Over 20 million UK households have home insurance and more than 60% of new policies are found on price comparison sites. Therefore it’s crucial that these companies are able to offer customers their best possible deals.
“Our investigation has provisionally found that ComparetheMarket has broken the law by preventing home insurers from offering lower prices elsewhere. This could result in people paying higher premiums than they need to.”
The CMA has issued ComparetheMarket a “statement of objections”, which sets out its provisional view that the contracts break competition law.
The company will now have an opportunity to respond in detail and the CMA will consider the response and any further evidence before reaching a final decision.
A ComparetheMarket.com spokesperson told the Chronicle:
“We are disappointed by the CMA’s provisional findings. We will carefully review the evidence once we have access to it, and look forward to working with the CMA over the coming months to ensure a satisfactory outcome.”
Further information can be found on the CMA’s price comparison website page.