UK price comparison site ComparetheMarket has been fined £1.7 million for breaching competition law.
An investigation by the Competition and Markets Authority (CMA) concluded that the comparison site contracts stopped insurers advertising more cheaply elsewhere.
Between December 2015 and December 2017, ComparetheMarket breached regulations by imposing wide ‘most favoured nation’ clauses on providers of home insurance selling through its platform.
ComparetheMarket’s clauses stopped home insurers from offering lower prices on other comparison websites and protected the company from being undercut elsewhere.
It also made it more difficult for rivals to expand and challenge its market position as other price comparison websites were restricted from beating it on price.
Ultimately, this meant that competition was restricted between price comparison sites and home insurers selling through these platforms.
Commenting on the decision, the CMA’s Executive Director for Enforcement Michael Grenfell said: “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.
“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.”
Grenfell added: “Digital markets can yield great benefits for competition, and therefore for consumers. We are determined to secure those benefits, and to ensure that competition is not illegitimately restricted.
“Today’s action should come as a warning – when we find evidence that the law has been broken, we will not hesitate to step in and protect consumers.”
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ComparetheMarket has strongly disputed the claims, with a spokesman saying 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.”
The CMA have been cracking down on firms attempting to stifle competition over the last few months. An investigation by the regulator in October found that the ticket exchange firm Viagogo’s acquisition of Stubhub would reduce market competition.
A probe found that Viagogo and Stubhub are “close competitors in an already very concentrated market” that includes no significant competitors.
In May the regulator acted against five of the largest banks in the UK after they failed to inform customers about unarranged overdraft charges.
The CMA secured refunds of up to £47 million from a host of high street banks, including RBS and HSBC.