ComparetheMarket Fined £17.9 Million by Regulator
The price comparison site was found to have breached competition law regarding contracts with home insurers.
Price comparison website ComparetheMarket has been issued a £17.9 million fine by the Competition and Markets Authority (CMA) for overcharging on home insurance.
An investigation by the competition watchdog found that the site imposed “most favoured nation” clauses in contracts between December 2015 and December 2017 that prohibited home insurance providers selling on its platform from offering lower prices on other comparison websites, protecting ComparetheMarket from being undercut by competitors.
The CMA said that the policy “limited competitive pressures” on insurers selling through ComparetheMarket and made it more difficult for competing price comparison websites to grow and challenge the company’s entrenched market position. The resulting slack in competition between ComparetheMarket and these other sites also resulted in higher insurance premiums, according to the CMA.
“Price comparison websites are excellent for consumers,” said Michael Grenfell, executive director for enforcement at the CMA. “They promote competition between providers, offer choice for customers, and make it easier for consumers to find the best bargains.”
“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.”
ComparetheMarket hit out at the ruling. “CompareTheMarket.com is disappointed with the CMA’s decision and does not recognise its analysis of the home insurance market,” the company said in a statement.
“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.”
ComparetheMarket is one of the UK’s largest price comparison websites and well-known for its television adverts featuring meerkat puppets.