On 26 September, the CMA published its final report following its one year market study into digital comparison tools (DCTs).
The report finds that DCTs offer two types of benefit: they make it easier and more appealing for customers to shop around, and they encourage suppliers to compete harder. DCTs are now widely used - most internet users have used a DCT - and customers have mainly positive experiences.
However, the CMA has identified some competition and consumer concerns. The CMA has also recommended that the ICO reviews data protection compliance once the forthcoming reforms are in place.
The CMA has opened an investigation into the use of 'wide Most Favoured Nation' clauses by one DCT in relation to home insurance, which the CMA suspects may infringe competition law. Wide MFNs prevent a supplier offering better prices on another DCT or the supplier's own website. The CMA has long been critical of wide MFNs, banning them in its Private Motor Insurance market investigation and investigating them in other sectors, but the CMA is yet to conclude that they amount to a competition law infringement.
The CMA is also critical of 'negative matching' advertising restrictions agreed between DCTs and suppliers which prevent one party appearing in online search results when the search terms include the other party's brand. And the CMA queries the justification for long-term non-resolicitation clauses preventing a DCT from contacting a customer who has used that DCT to purchase a supplier's products. However, the CMA is not pursuing competition investigations of these restrictions at the moment, because of lack of evidence of consumer impact.
The CMA outlines how DCTs should behave in order to support consumer trust and informed choice - DCTs should be Clear, Accurate, Responsible and Easy to use (CARE).
The CMA also makes a series of recommendations to Government, sector regulators, charities/consumer bodies and users of DCTs, aimed at adding to the benefits consumers can get from using DCTs.
DCTs and suppliers should review their agreements for any of the competition restrictions highlighted by the CMA. They should also ensure the follow the CARE principles. We may well see further competition or consumer enforcement coming out of this market study.
The year-long examination found that these sites offer a range of benefits, including helping people shop around by making it easier to compare prices and forcing businesses to up their game. But where sites are not working in people’s best interests, the CMA is taking action. As part of this, it is opening a competition law investigation into how one site has set up its contracts with insurers, because it suspects this may result in higher home insurance prices.