The Competitions & Markets Authority has sent out a warning to price comparison sites they must be far more transparent about their operations – as well as how they use customer data – after launching an investigation into Comparethemarket.com’s suspected preferential deals on home insurance.
Although the CMA refused to name the company publicly, it has been widely reported to be the meerkat-loving site, which is alleged to have set up so-called “most favoured nation clauses” with a number of home insurers.
These clauses, which are banned in many circumstances under EU law, involve an agreement between the two parties that the insurer will not offer lower-priced deals elsewhere on the Internet. The CMA argues that these deals can result in higher home insurance premiums for customers.
The move was revealed as the CMA published its final report into the price comparison market, which includes a number of warnings over future conduct of companies operating in the sector.
While it found that most people in the UK have used a comparison site at least once, and that more than 90% of the people it surveyed were very or fairly satisfied with the sites they used, CMA chief executive Andrea Coscelli insisted that “improvements are needed to help people get even better deals”.
As part of these improvements, sites must explain their collection and use of consumers’ data and what controls consumers can exercise. They must also prominently provide a general explanation of how they make money; clearly explain any ownership links with the suppliers they show; and clearly state when and how commercial relationships have affected the results presented.
The CMA also wants the Information Commissioner’s Office to review the practices of price comparison sites once GDPR and the new ePrivacy Regulation are in force.
In June, the ICO fined Moneysupermarket £80,000 for sending over 7 million emails to customers who had made it clear they did not want to be contacted in that way.
Moneysupermarket hit in pocket over consent breach
CMA slams brakes on BMW ban on comparison sites
Energy sites ‘hoodwink’ customers
Comparison sites in the dock again
Public ‘don’t trust comparison sites’
Is your brand safe on a comparison site?