Business

ComparetheMarket fined £17.9m for competition law breach

ComparetheMarket has been fined £17.9m after the regulator found the company had breached competition law.

The Competition and Markets Authority’s investigation concluded that the comparison website had imposed wide “most favoured nation” clauses on providers selling home insurance.

These clauses stopped the home insurers from offering lower prices on other comparison website and protected ComparetheMarket from being undercut elsewhere.

They also made it more difficult for the website’s rivals to expand and challenge its dominance, as they were prevented from beating it on price.

The breaches took place between December 2015 and December 2017 and the regulator said they restricted competition between the comparison website, likely resulting in higher insurance premiums.

The CMA also said that, had it not been for the clauses, ComparetheMarket would have had to compete for lower prices from the home insurers, for example by reducing its commission.

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. 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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