Comparethemarket’s brand champion Aleksandr Orlov will no doubt be quietly cracking open the Beluga Noble after the BLG-owned company has booted out a £17.9m fine for keeping home insurance costs artificially high with a tribunal ruling the penalty was based on “no reliable evidence”.
The issue dates back to 2017, when the Competition & Markets Authority launched an investigation into digital comparison tools and found that between December 2015 and December 2017, Comparethemarket breached competition law by imposing “most favoured nation” clauses on providers of home insurance selling through its platform.
These clauses prohibited home insurers from offering lower prices on other comparison websites and protected Comparethemarket from being undercut elsewhere, the CMA argued. 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.
The CMA imposed the £17.9m penalty in November 2020. However, Comparethemarket appealed the decision at the Competition Appeal Tribunal, advised by law firm Linklaters.
In a unanimous judgment published this week, the tribunal upheld the appeal on five of the six substantive grounds, thereby overturning both the decision and the penalty imposed.
In particular, the tribunal held that the market definition adopted by the CMA in the decision was flawed and that the CMA had failed to show that the “most favoured nation” clauses had the anti-competitive effects alleged in the decision.
A Comparethemarket spokesman said: “We fully support the work the CMA does as vital to protecting the integrity of the markets.
“We are pleased that this matter is now concluded and are, of course, happy with the outcomes. We look forward to continuing our work to help people save money at a time when we are needed more than ever.”
The CMA, which has until September 16 to apply for permission to appeal the judgment, said it was “currently considering its contents as well as any next steps”.
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