ComparetheMarket hit with £17.9m fine

The Competition and Markets Authority has dished out a £17.9m fine to ComparetheMarket following an investigation into the use of ‘most favoured nation’ clauses for home insurers selling through its platform.

In a statement, the CMA said: “These clauses prohibited the home insurers from offering lower prices on other comparison websites and protected ComparetheMarket from being undercut elsewhere.

“They also made it harder for ComparetheMarket’s rivals to expand and challenge the company’s already strong market position as other price comparison websites were restricted from beating it on price.

“As a result, competition between price comparison websites, and between home insurers selling through these platforms, was restricted. The CMA found that this is likely to have resulted in higher insurance premiums.”

Michael Grenfell, the CMA’s Executive Director for Enforcement, added: “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.”

In a statement ComparetheMarket said: “ComparetheMarket 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 Compare the Market 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.”

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