Known for the meerkat characters in their adverts ComparetheMarket has come under fire
Source: Creative Commons
Price comparison site says that it “fundamentally” disagrees with CMA ruling
Price comparison website ComparetheMarket has been fined £17.9m by the competition watchdog for keeping home insurance costs artificially high.
The Competition and Markets Authority (CMA) stated that during a two-year period the company’s contracts stopped insurers using its platforms from offering cheaper alternatives to their products through competitor websites. The CMA found that this was likely to have resulted in higher insurance premiums for consumers.
ComparetheMarket, which is known for its advertising campaign featuring meerkat characters and the catchphrase “simples”, slammed the ruling and insisted that it “fundamentally” disagreed with the CMA’s conclusions.
A statement from the company said it did not recognise the CMA’s analysis of the home insurance sector and said that it fundamentally disagreed with the conclusions the CMA had drawn, and would be carefully examining the detailed rationale behind the decision.
“For 14 years ComparetheMarket 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.” the statement said.
The competition authority said clauses in contracts between December 2015 and December 2017 prohibited ComparetheMarket’s home insurance advertisers from offering lower prices on other comparison websites, which prevented other platforms from expanding their businesses.
It concluded that insurers featured on the price comparison site were bound by contracts and were prohibited from offering cheaper deals elsewhere.
The competition authority added that without the clauses ComparetheMarket would have competed harder to get lower prices from the home insurers.
“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,” said Michael Grenfell, executive director of enforcement at the CMA.
“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.”