When price comparison websites first launched they were seen as a significant threat to the way insurers and brokers do business. However, throughout the decade or so that has passed, the websites have been surrounded by controversy – and now they face another investigation.
The Competition and Markets Authority (CMA) has revealed that it will examine the way price comparison websites operate.
According to a BBC report this morning, the watchdog wants to examine how the comparison websites can be used to maximise consumer benefits believing that they have helped to increase competition. However, it has also outlined some concerns with the services.
In particular, the CMA is set to look into whether the arrangements between providers and suppliers that sell through comparison websites might actually be restricting competition.
Currently, there are several insurers that refuse to appear in the listings of comparison websites such as Gocompare.com and moneysupermarket.com; while others have commercial arrangements in order to appear in sponsored positions in their comparison tables. Typically, companies will pay an effective “commission-style” fee for new customers gained.
Speaking to the BBC, Andrea Conscelli, acting chief executive of the CMA, remarked that the role of comparison websites has generally been positive but that more could be done.
“Digital comparison tools have played a big part in changing markets for the better, bringing new ways of doing things and forcing businesses to up their game,” she said.
“Consumers have benefited as choice and access to goods and services have grown.”
However, she remarked that the services have been more successful in some sectors than others and wishes to understand why this is the case and whether more could be done to ensure consumers and businesses can benefit from them more widely.
Do insurers now need price comparison websites?
Is Gocompare about to launch overseas?