UK government department launches study into online price comparison tools


The UK Competition and Markets Authority (CMA) has announced that it will be looking into how digital comparison tools (DCTs) operate.

As part of its research, the CMA will seek to explore whether the arrangements between DCTs and the suppliers that sell their services through them might restrict competition.

Additionally, the CMA will seek to understand whether consumers would benefit from being more aware of how DCTs earn their money and the potential impact this may have on the services they offer.

Andrea Coscelli, CMA acting chief executive, said in a statement: “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 too,” explained Coscelli.

As part of its research, the CMA will seek to understand how the potential consumer benefits of DCTs can be maximised as well as attempting to reduce any barriers to how they work.

The study, the statement added, will focus on four key themes:

  • what consumers expect from DCTs, how they use them and their experiences
  • the impact of DCTs on competition between suppliers listed on them
  • how effectively DCTs compete with each other
  • the effectiveness of existing regulatory approaches to DCTs

It will also explore the role of DCTs in four case study sectors: broadband, home insurance, credit cards and flights.

The news comes after the CMA recommended that British high street banks launched a tech “revolution” in order to try and promote better competition across the sector just last month.