The CMA has fined ComparetheMarket £17.9m after clauses used in the company’s contracts with home insurers were found to have breached competition law.
An investigation launched by the authority concluded that between December 2015 and December 2017, the price comparison website imposed wide “most favoured nation” clauses on home insurance providers selling through its platform.
The clauses prohibited home insurers from offering lower prices on other comparison websites, protecting ComparetheMarket from being undercut from competition and thus breaching competition law.
The CMA added that these clauses 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”.
Competition between both price comparison websites and home insurers selling through these platforms was therefore restricted. The CMA also found that this is likely to have resulted in higher insurance premiums.
Michael Grenfell, executive director for Enforcement at the CMA, said: “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.”
He added: “Digital markets can yield great benefits for competition, and therefore for consumers. We are determined to secure those benefits, and to ensure that competition is not illegitimately restricted.
“Today’s action should come as a warning – when we find evidence that the law has been broken, we will not hesitate to step in and protect consumers.”