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Compare The Market fined £17.9m for banning home insurers from offering cheaper deals elsewhere

Compare The Market fined £17.9m for banning home insurers from offering cheaper deals elsewhere

Price comparison website Compare The Market has been fined £17.9 million by the competition watchdog, after it banned home insurers from offering customers cheaper prices elsewhere.

An investigation by the Competition and Markets Authority (CMA) found Compare The Market's contracts included clauses that prevented home insurers on its site from offering cheaper deals to other comparison websites.

Michael Grenfell, the CMA's executive director for enforcement told BBC Radio 4's Today programme that it even found examples where insurance companies wanted to offer promotions or discounts on other websites but were prevented from doing so.

The CMA says this is likely to have led to higher home insurance prices for customers – as other comparison sites were less able to compete by offering lower prices, while Compare The Market itself had less incentive to be competitive in getting lower prices from insurers.

As this is a complex case, it's unclear how many households may have been impacted or how much more on average they paid – and consumer refunds aren't being offered.

If you think you've overpaid, the only real option is to claim compensation through the courts, but this could be costly and hard to prove; particularly as Compare The Market refutes the claims and says it "fundamentally" disagrees with the watchdog's conclusions.

See our Cheap Home Insurance guide for tips on slashing the price of your cover.

What did the investigation find?

The CMA says that between December 2015 and December 2017, Compare The Market broke competition law due to the clauses it made home insurance providers selling policies through its site sign up to.

Specifically, the clauses meant:

  • Insurers couldn't offer cheaper deals on other price comparison websites.

  • Rival price comparison websites were less able to get a price advantage over Compare The Market. For example, by offering lower commission fees to encourage insurers to quote lower prices on their sites.

  • Compare The Market did not have to compete as hard to get lower prices from home insurers. It could have, for example, reduced its own commission fees if it needed to compete with other sites on price.

After the CMA launched its investigation in 2017, Compare The Market scrapped these contract clauses.

What does the watchdog say?

Mr Grenfell said: "Price comparison websites are excellent for consumers. They promote competition between providers, offer choice for customers, and make it easier for consumers to find the best bargains.

"It is therefore unacceptable that Compare The Market, which has been the largest price comparison site for home insurance for several years, used clauses in its contracts that restricted home insurers from offering bigger discounts on competing websites – so limiting the bargains potentially available to consumers."

What does Compare The Market say?

A Compare The Market spokesperson said: "CompareTheMarket.com is disappointed with the CMA's decision and does not recognise its analysis of the home insurance market.

"We fundamentally disagree with the conclusions the CMA has drawn and will be carefully examining the detailed rationale behind the decision and considering all of our options.

"For 14 years, CompareTheMarket.com and the other price comparison websites have revolutionised the way in which consumers shop for their insurance. In the past year alone, we have helped more than six million customers save money."