Britain’s competition watchdog is understood to be investigating comparethemarket.com over the firm’s arrangements with insurers, which could be resulting in higher home insurance costs for consumers.
The comparison website, famous for its use of Sergei the meerkat in its TV adverts, is being probed by the Competition and Markets Authority (CMA) over the use of so called “most favoured nation clauses”.
The special contracts, where an insurer agrees with a comparison website not to offer a lower deal with a rival site, “may result in higher home insurance prices”, the CMA said.
While the CMA did not name comparethemarket.com, the Press Association understands that it is the company under investigation.
The firm said in a statement: “We welcome the CMA’s conclusions that digital comparison tools are a force for good which lower prices for consumers and inject competition into markets.
“comparethemarket.com operates some simple contractual arrangements with home insurers to ensure that our customers always get the lowest available price. We welcome the opportunity to discuss this further with the CMA.”
Sergei and comparethemarket.com are facing a CMA probe (PA)
In its final report into the use of price comparison sites, the antitrust watchdog’s wider findings include setting clear “ground rules” for all online operators.
This includes communicating how they plan to use people’s personal data, and clearly displaying important information like price and product description.
The principle recommendations of the CMA’s report demands that all sites should be clear about how they make money, how many deals they’re displaying and how they are ordering the results.
It should also be made as “easy as possible” for people to make effective comparisons or use different sites, the CMA said.
Andrea Coscelli, CMA chief executive, added: “Our study has found that most people in the UK have used a comparison site at least once, so it is vital that everyone gets the benefits they deserve.
“The good news is that more than 90% of the people we surveyed were very or fairly satisfied with the sites they used.
“But we have also found that improvements are needed to help people get even better deals. We have set out ground rules for how sites should behave, as well as being clear on how regulators can ensure people have a better experience online.”