On 28 March 2017 the Competition and Markets Authority (CMA) published an update paper on its ongoing market study into Digital Comparison Tools (DCTs)2 across sectors including insurance, credit cards, energy, broadband and flights.
The CMA views DCTs as beneficial to competition, with a potential to “disrupt the status quo” where they operate. They encourage consumers to shop around and switch and make it easier for new or small suppliers to enter the market. While the CMA considers that competition in the DCT market is generally effective, it identified certain conduct which may raise competition concerns including agreements between DCTs and suppliers containing wide or narrow MFN (Most Favoured Nation) clauses, restrictions on bidding for online branded search terms and non-resolicitation clauses restricting the ability of a DCT to re-contact a consumer for a specific period after the DCT has facilitated a sale in respect of a particular product.
The CMA has however decided not to make a reference for a market investigation and intends instead to use a combination of consumer and competition enforcement cases, recommendations to regulators and/or government and working with firms in the relevant sectors to increase the benefits delivered by DCTs to consumers. The CMA identified in its update paper certain areas of focus for the next stage of its market study: (i) maximising consumer confidence and building trust, (ii) improving DCT access to necessary inputs, (iii) making competition more effective and (iv) improving regulation. The CMA has identified a lack of transparency in relation to complaints policies, market coverage, business models and ranking methods and data storage and use as a concern. It intends to improve industry practice and review cases for enforcement action in order to maximise consumer confidence and build trust. To make the regulation of DCTs more effective, it is considering the introduction of cross-sector regulation or principles.
Stakeholders are invited to comment on the update paper and certain specific questions before 24 April 2017. The CMA will issue a final report by 29 September 2017.