Meerkat’s price comparisons were not so ‘simples’, watchdog rules
‘It is unacceptable the price comparison site limited the bargains potentially available to consumers’
THE price comparison web- site Comparethemarket has s been fined £17.9 million by the he competition watchdog for using ing practices which could potentially ially keep home insurance costs artirtificially high.
The company used clauses es in its contracts that restricted d home insurers from offering g bigger discounts on compet- i ng websites, a t wo- year r investigation by the Competi- tion and Markets Authority y (CMA) found. It meant getting the c cheapest possible deal was not as easy as the company ma made out.
H However, Comparethe Market, known for its adverts featuring animated meerkats, left, and th the catchphrase “simples”, said yesterday that it “fundame mentally disagreed” with the co conclusions and would be co considering its options. Price comparison websi sites are s upposed to e encourage competitive pricing and make it easier f or customers to shop around for deals or switch providers. But the CMA said this restricted competition was likely to have resulted in higher insurance premiums for customers.
James Daley, of Fairer Finance said: “Unfortunately the only way to be sure you have got yourself the best price is to go to all the big comparison sites.
“You shouldn’t be having to go to those lengths.
“But if there are deals like this out there it’s clear that they aren’t acting in the customer’s best interest and the consumer could be paying too much.”
Michael Grenfell, executive director for the CMA, 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.”
He said the CMA was determined to “secure the benefits” of digital markets for consumers.
The so-called “most-favoured nation” clauses were used by the company between December 2015 and December 2017.
Comparethemarket contacted insurers in November 2017, two months after the launch of the CMA’S investigation, to inform them it would not be enforcing the clauses.
A spokesman for the site 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.”
He added: “The site has helped six million people save money in the past year.
“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.”