The Peterborough Evening Telegraph
TOP CITY FIRM ‘BROKE THE LAW’
BGL Group vows to work with authorities to secure ‘satisfactory outcome’
Bosses of Peterboroughbased ComparetheMarket have voiced their disappointment at claims it has broken competition law.
The price comparison website, which is owned by insurance giant The BGL Group, of Orton Southgate, has been criticised by the Competition and Markets Authority (CMA) following a lengthy inquiry.
The CMA has been investigating the use of so-called ‘most favoured nation’ clauses in the price comparison website’s contracts that it is claimed stop home insurers from quoting lower prices on rival sites.
It has provisionally found these clauses could be causing customers to miss out on better home insurance deals.
CMA chief executive Andrea Coscelli said: “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.”
She said: “Over 20 million UK households have home insurance and more than 60 per cent 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.”
The CMA states the clauses prevent rival comparison sites and other channels from trying to win home insurance customers by offering cheaper prices than ComparetheMarket.
It also says this 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 and as a result, people buying home insurance could be missing out on cheaper premiums.
A spokeswoman for the BGL Group, which employs about 1,800 people in Peterborough, said: “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.”
BGL faces a fine of up to 10 per cent of its annual worldwide group turnover if it is found to have breached UK and European Union competition laws.
In October BGL reported revenues of £660.9 million meaning a possible fine of up to £66 million.