The UK Competition and Markets Authority (CMA) has published its final report following a market study into the use of price comparison sites and other apps. 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.
The CMA found some areas where the sites might not be working in people’s best interests. This led to the CMA opening a competition law investigation into how one site had set up its contracts with insurers, as it suspected this may result in higher home insurance prices.
The CMA has also laid down ground rules for all sites on issues such as communicating how they plan to use customers’ personal data and clearly displaying important information like price and product description.
Antti Lemberg, who leads much of Frontier’s work on this area, said “The main outcome of the CMA’s work is the introduction of the new ground rules that the CMA expects sites to follow. The ground rules are well-intentioned, but I fear that they might well become another example of tick-box compliance that already blights much of conduct regulation, especially in financial services. I would have preferred to see greater emphasis on customer outcomes. For example, requiring the sites to clearly state when and how commercial relationships have affected the results presented might lead to unintended consequences, if this led customers to make appreciably less optimal choices for their circumstances.”
Frontier Economics advised a leading financial services provider in relation to the CMA’s market study.
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