The UK competition watchdog has opened an investigation into one of the country’s largest price comparison sites amid concerns it may be encouraging higher home insurance prices.
The site has not been named but the Press Association has reported it to be comparethemarket.com, which is well-known for its TV adverts starring a meerkat named Sergei.
The site is suspected of setting up so-called “most favoured nation clauses” with a number of home insurers.
These clauses, which are prohibited in many circumstances under EU law, involve an agreement between the two parties that the insurer will not to offer lower-priced deals elsewhere on the internet.
This, the Competition and Markets Authority (CMA) contends, can result in higher home insurance premiums for customers.
comparethemarket.com 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.”
The investigation was revealed as the CMA published its final report into the price comparison market, which found that most people in the UK have used a comparison site at least once.
“The good news is that more than 90% of the people we surveyed were very or fairly satisfied with the sites they used,” says CMA chief executive Andrea Coscelli.
“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.”
Source: Sky