The Competition and Markets Authority (CMA) last year announced they would be conducting a market study on Digital Comparison Tools (DCTs), so sites such as Money Supermarket and Go Compare as well as app based DCTs. On 28th March they released their mid-study report which highlighted some key areas of interest.
Overall the update paper was positive, in particular demonstrating the value to consumers of DCTs. Some encouraging stats were highlighted such as 97% of customers being aware of DCTs, with 85% of consumers having used them and 90% of those users said they were very of fairly satisfied with the DCTs they used. Interestingly most DCT users said they used more than one DCT to shop around, highlighting the importance of good competition based on user experience, pricing and available brands.
Just 11% of users said they thought that DCTs should show the ‘whole of market’, the rest believing that the coverage was satisfactory. This backs up the thoughts of most within the industry that forcing a ‘whole of market’ regulation would lead to a reduction in competition but also no material difference in consumer experience, in fact it would be most likely to reduce the opportunities available to consumers. The CMA go as far as to say they agree with the concerns various stakeholders have raised within the industry regarding this regulation and that the evidence they have seen shows that whole of market coverage is not necessary.
There were however some points that the CMA felt could be improved such as transparency from DCTs around market coverage and how personal information is stored and used (particularly relevant given new EU privacy laws coming into effect next year). They also noted that it was not clear to consumers what they should do if things go wrong and how DCTs are regulated. Most DCTs will be regulated under industry standards or regulations such as the FCA, Ofcom and Ofgem, but this is perhaps not always clear. Another key point the CMA raised was a concern around the availability of inputs from suppliers regarding pricing information, broadband speeds and eligibility. This highlights an area for both Networks and Suppliers to be aware of and look to improve.
The CMA noted that they are continuing to explore terms limiting bidding for online search terms, referred to as non-brand bidding or negative matching arrangements.
The full reports can be accessed here. There is a request for responses which is open until 24th April 2017 and the final report will be published on 28th September 2017. If you have any questions or concerns do feel free to get in touch.
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