Expert legal advice from the competition lawyers

Most favoured nation clauses in price comparison websites sector

First published by Author on November 05, 2019 in the following categories: Advertising Consumer Law Industry Pricing Selling Restrictions and tagged with | | | | |

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As it has been a while since we looked at this one, here’s the latest in the investigation into alleged most favoured nation clauses in the price comparison website sector.

The investigation that’s being carried out by the Competition and Markets Authority (CMA) is over the alleged use of such clauses for price comparison websites in relation to insurance products. The term “most favoured nation” originates from international trade agreements, whereby more favourable trade terms have been used between countries who favour each other more. In terms of competition law, it’s about contractual provisions whereby a seller may provide their best terms specifically to a particular buyer.

Such behaviour can restrict and distort competition, which is why it’s important for the CMA to look into it.

About the investigation into most favoured nation clauses

The current CMA investigation into alleged most favoured nation clauses involves the home insurance market in terms of price comparison websites.

The investigation was opened in September 2017, and since then, a number of steps have been taken as follows:

  • September 2017 – March 2018: Initial investigation;
  • March 2018: decision made to proceed with investigation;
  • November 2018: statement of objections issued;
  • November 2018 – January 2019: receipt of representations in reply to the statement of objections;
  • February 2019 to December 2019: consideration of the representations.

One of the biggest developments was, of course, the issuance of the statement of objections in November 2018. This was a statement of clear allegations that a number of companies are in breach of the law. Although the investigation has not concluded, and they’re still allegations at this point, it’s a big development.

The companies at the centre of the allegations are BGL (Holdings) Limited, BGL Group Limited, BISL Limited (BISL), and Compare The Market Limited.

Another important investigation

The CMA’s investigation into the alleged use of most favoured nation clauses in the price comparison website market is undoubtedly big. Consumers are so much more reliant on tools like comparison websites, and if any form of misleading is going on, it needs to be dealt with seriously.

The CMA could impose financial penalties that can be in the millions. Although we’re not at that stage, and it may be that no foul play has occurred, it would be huge news if the law has been broken at all, and it cannot be ignored.

We should know more toward the end of the year in terms of final findings. As we take a moment to remember how quickly time flies by these days, the end of the year is next month!

The content of this post/page was considered accurate at the time of the original posting and/or at the time of any posted revision. The content of this page may, therefore, be out of date. The information contained within this page does not constitute legal advice. Any reliance you place on the information contained within this page is done so at your own risk.

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