Price comparison websites face review by competition watchdog
The competition watchdog has launched a review of price comparison websites to investigate public awareness of how they earn their money and the level to which they actually benefit consumers.
The Competition and Markets Authority (CMA) said the investigation will consider concerns such as whether consumers could me made more aware about how the sites earn money and how this affects their service.
It will also examine if arrangements between the sites and their suppliers might restrict competition.
The CMA said that while price comparison websites had ultimately "helped to inject significant competition into a number of markets", it noted "concerns about certain issues, including whether consumers can trust the information that's available".
It will focus on comparison websites for car insurance, utilities and bank accounts, following on from its previous investigations into individual sectors and concerns over whether sites promote certain deals higher than others in their search rankings.
CMA acting chief executive Andrea Coscelli said: "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."
The inquiry will run for an initial period of six months, including a four-week public consultation.
Richard Neudegg, head of regulation at uSwitch, said: "We welcome this announcement by the CMA. Comparison websites play an essential role in arming consumers with the information and tools they need to engage with markets - whether that's helping them cut hundreds of pounds from their energy bill, access a faster broadband package or switch to a more competitive car insurance deal.
"Millions of consumers are already using digital comparison tools regularly to get better deals, but there are huge opportunities for the CMA to help comparison services continue to innovate and work even harder for more consumers."
Consumer Minister Margot James said: " Millions of people use price comparison websites to switch suppliers and get a better deal on everyday services, from home energy and broadband to mortgages and insurance.
"The Government welcomes this market study, as consumers deserve to have access to the best deals and the clear, reliable information they need to make the best decisions."
Which? director of policy and campaigns, Alex Neill, said; " People want to know they are getting a good deal for essential services such as energy, insurance and broadband.
"Price comparison websites should play a vital role in helping people to compare offers, so this market study is a welcome step to ensure consumers can be confident about getting the right deal for them."