PRICE comparison site CompareTheMarket has been fined £17.9million by the competition watchdog for making home insurance premiums artificially high.
It entered into agreements with insurance companies that banned them from offering lower prices or better deals on rival websites, the Competition and Markets Authority (CMA) said. The company, known for its cuddly meerkat mascots and ‘simples’ catchphrase, said it ‘fundamentally disagreed’ with the findings, which follow a three-year investigation.
But Rocio Concha, policy director of consumer group Which? welcomed the fine.
‘The actions of CompareTheMarket have fallen well below the standard you’d expect from a company who claims to be working in the best interest of consumers,’ she said. The CMA found the company, which is part of the BGL Group, exploited its leading status between December 2015 and December 2017, by imposing clauses on home insurance providers wanting to sell products on its website.
These meant rival comparison sites could not advertise the same products for cheaper prices through methods such as reducing their commission fees with insurers, the CMA said. This weakened competition across the market and reduced pressure on CompareTheMarket to lower its own charges, according to investigators.
Michael Grenfell, the CMA’s executive director for enforcement, said the company had ‘restricted insurers from offering bigger discounts on competing websites — so limiting the bargains potentially available to consumers’.
Rival site MoneySuperMarket said it had never used such clauses, as did Confused.com’s CEO Louise O’Shea, who added: ‘Thankfully, it is not an industry-wide issue.’
CompareTheMarket told the CMA in November 2017 it would no longer enforce the clauses. It said it was ‘disappointed with the CMA’s decision and does not recognise its analysis of the home insurance market’.
It was examining the CMA’s reasons and considering all its options.