Peterborough-based ComparetheMarket fined £17.9 million for breach of competition law

The fine follows a lengthy investigation by the Competition and Markets Authority (CMA) into claims that ComparetheMarket had imposed so-called ‘most favoured nation’ clauses on providers of home insurance selling through its platform.

It meant that home insurers were stopped from quoting lower prices on rival websites and could be causing customers to miss out on better deals.

The breach of competition law is said to have occurred between December 2015 and December 2017.

ComparetheMarket is owned by the BGL Group, based in Bakewell Road, Orton Southgate, where it employs about 1,800 people.

A statement released by the CMA states: “These clauses prohibited the home insurers from offering lower prices on other comparison websites and protected ComparetheMarket from being undercut elsewhere.

“They also made it harder for ComparetheMarket’s rivals to expand and challenge the company’s already strong market position as other price comparison websites were restricted from beating it on price.

As a result, competition between price comparison websites, and between home insurers selling through these platforms, was restricted.

“The CMA found that this is likely to have resulted in higher insurance premiums.”

The CMA also said that two months after the investigation began in September 2017, ComparetheMarket had contacted insurers to tell them it would no longer be enforcing ‘most favoured nation’ clauses.

Michael Grenfell, the CMA’s Executive Director for Enforcement, 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 ComparetheMarket, 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.

“Digital markets can yield great benefits for competition, and therefore for consumers.

“We are determined to secure those benefits, and to ensure that competition is not illegitimately restricted.

“Today’s action should come as a warning – when we find evidence that the law has been broken, we will not hesitate to step in and protect consumers.”

The fine of £17,910,062 is less than was originally feared when the investigation began in September 2017.

It was reported that BGL could have faced a fine of 10 per cent of its worldwide earnings, which would have amounted to a fine of more than £60 million.

ComparetheMarket has been contacted for a response.