The effectiveness of price comparison websites is to come under scrutiny from the Competition and Markets Authority (CMA) in a new probe.

The CMA launched a study today looking at tools that allow consumers to compare products and services on quality and price, and help them switch between suppliers, including price comparison websites and smartphone apps.

Its investigation will look at how they work for consumers, businesses and the economy in general, and will address four key themes:

  • What consumers expect from digital comparison tools, how they use them and their experiences
  • 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 rules surrounding digital comparison tools

Previous CMA reviews of the motor insurance, energy and banking industries highlighted that comparison tools have a big role to play in helping consumers find the best deals. This new study will be looking at how comparison tools can be improved and resolve any issues around how they currently work.

The investigation will also address some of the concerns that people have about comparison tools, such as how they make money and how this might affect the services they offer. And it will look at whether consumers can trust the information comparison tools give.

The CMA is asking people to respond to the study by 5pm on Monday 24 October. There's information on how to do this on the CMA website.

'Changing markets for the better'

Andrea Coscelli, CMA acting chief executive, says: "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. 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 as well."