On 29 September 2016, the Competition and Markets Authority (“CMA”) launched a market study into digital comparison tools (such as price comparison websites and smartphone apps) in order to assess “how they are working for consumers, business and the economy.”
Digital comparison tools allow customers to compare products and services on quality and pricing and help customers to switch between suppliers. The CMA will look at how to maximise the potential benefits of digital comparison tools for consumers as well as how to reduce any barriers to how they work.
However, there are some concerns regarding digital comparison tools. Therefore, the CMA also proposes to consider whether customers would benefit from being better informed of how digital comparison tools earn money and the impact this might have on the services they offer. In addition, the CMA will consider whether arrangements between digital comparison tools and the suppliers that sell through them might restrict competition.
The CMA has stated that the study will address the following key areas:
- What customers expect from digital comparison tools, how they use them and their experiences of them.
- The impact of digital comparison tools on competition between the suppliers listed on them.
- How effectively digital comparison tools compete with each other.
- The effectiveness of existing regulatory approaches to digital comparison tools.
In carrying out its investigation, the CMA will focus on digital comparison tools in four case study sectors (broadband, home insurance, credit cards and flights) but is also interested in issues in other sectors.
The CMA must announce within 6 months whether it plans to refer the market for a more in-depth investigation and publish its report within 12 months, setting out its findings and any action proposed.
Gustaf Duhs