Price comparison websites, mobile apps and other digital tools that enable consumers to compare products and services are to be probed by the competition watchdog.
The Competition and Markets Authority (CMA) says it will consider “how to maximise the potential benefits of digital comparison tools for consumers, and reduce any barriers to how they work”.
The watchdog says its past reviews of sectors such as private motor insurance, energy and banking have highlighted how these tools can play a “powerful role” in increasing competition and helping consumers to find better deals and switch.
But it adds that it will also consider the concerns sometimes expressed about such tools, including whether consumers would benefit from being made more aware of how these tools earn money and the impact this might have on the services they offer. It will also consider whether arrangements between comparison tools and the suppliers that sell through them might restrict competition.
Last year the UK’s five biggest comparison sites were forced to defend their sales practices in front of a panel of MPs.
At Moneywise we aim to provide comparison of all the products in the market (not just the ones we have deals with). To shop around for the best financial products for your situation, visit Moneywise Compare.
Andrea Coscelli, CMA acting chief executive, says: “Since emerging a decade or so ago, such tools have helped to inject significant competition into a number of markets, including private motor insurance. They have made it easier for consumers to engage in many markets.
“However, they have been more successful in some sectors than others. We want to understand why this is the case and whether more can be done to ensure consumers and businesses can benefit from them more widely. Some people have also raised concerns about certain issues, including whether consumers can trust the information that’s available, and the study will look at these issues too.”
- If you’re comparing insurance, check out the Most Trusted Insurance Comparison Sites, as voted for by Moneywise readers in our Customer Services Awards 2016.
The CMA must announce within six months whether it intends to refer the market for a more in-depth investigation, and it must publish its report within 12 months, setting out its findings and the actions (if any) it proposes to