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ComparetheMarket fined £17.9million for keeping home insurance costs artificially high
19 November 2020, 08:58
Price comparison site ComparetheMarket has been fined £17.9 million after the watchdog authority found that clauses in its contracts with home insurers broke competition law.
The Competition and Markets Authority (CMA) said the website prohibited home insurers on its platform from offering lower prices on other comparison websites, ensuring it was not undercut elsewhere.
As a result, competition between CompareTheMarket and its rivals was restricted and it is likely to have resulted in customers paying higher insurance premiums, the CMA said.
Michael Grenfell, the CMA's executive director for enforcement, 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.
"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."
But ComparetheMarket said it was disappointed by the decision and that it did not recognise the CMA's analysis of the market.
A spokeswoman for the company said: "CompareTheMarket.com is disappointed with the CMA's decision and does not recognise its analysis of the home insurance 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.
"For 14 years CompareTheMarket.com and the other price comparison websites have revolutionised the way in which consumers shop for their insurance.
"In the past year alone, we have helped more than six million customers save money.
"We will continue to deliver on our mission to drive competition, transparency and choice that benefits consumers, so our customers get the best deals possible."
An investigation by Which? in 2018 found that some price comparison websites offering car insurance had multiple errors.
Millions were "not getting a clear picture from the websites they visit", the consumer's association concluded.
Customers are recommended to search on more than one price comparison website when buying utilities, financial products and services.