UK watchdog launches probe into price comparison sites

With price comparison websites from insurance to hotels and air fares mushrooming in India, consumers may be advised to take note that similar price comparison websites in the UK are facing a competition watchdog review into whether the public understands how they earn their money, and the level to which they benefit consumers.

The Competition and Markets Authority (CMA) said its investigation will consider concerns such as whether consumers could be made more aware about how the popular sites – which include Moneysupermarket, uSwitch, Go Compare and Compare the Market – earn money and how this affects their service.

It will also examine if arrangements between the sites and their suppliers might restrict competition.

The CMA said it will focus on comparison websites for car insurance, utilities and bank accounts, following on from its previous investigations into individual sectors and concerns over whether sites promote certain deals higher than others in their search rankings.

While price comparison websites had ultimately ''helped to inject significant competition into a number of markets'', it said it had ''concerns about certain issues, including whether consumers can trust the information that's available''.

Andrea Coscelli, acting chief executive of the CMA, said, ''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. Consumers have benefited as choice and access to goods and services have grown.

''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.''

He adds, ''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.''

The inquiry will run for an initial period of six months, including a four-week public consultation.

Richard Neudegg, head of regulation at uSwitch, said, ''We welcome this announcement by the CMA. Comparison websites play an essential role in arming consumers with the information and tools they need to engage with markets – whether that's helping them cut hundreds of pounds from their energy bill, access a faster broadband package or switch to a more competitive car insurance deal.

''Millions of consumers are already using digital comparison tools regularly to get better deals, but there are huge opportunities for the CMA to help comparison services continue to innovate and work even harder for more consumers.''

In June, the CMA published the findings of its two-year investigation into the energy market that was immediately dubbed ''a damp squib, a bit of a nothing result'', despite costing millions of pounds.