ComparetheMarket fined £17.9m for most-favoured-nation clauses

The UK Competition and Markets Authority recently fined ComparetheMarket.com £17.9m for its use of most favoured nation (MFN) clauses in contracts with insurers that sold their products via ComparetheMarket.com.

An MFN clause usually requires one party to agree not to offer better terms/prices to third parties than those it has agreed with the other party to the contract. The CMA considered that ComparetheMarket's MFN clauses meant insurers could not offer cheaper deals on competing price comparison websites.

The CMA concluded that the MFN clauses breached competition law on the basis that:

• other price comparison providers could not compete effectively – according to the CMA the agreements with MFNs covered approximately 40% of sales of home insurance made through all price comparison sites during the two year period of the infringement;
• the CMA considered that ComparetheMarket did not have to work as hard to compete effectively;
• the CMA considered that ComparetheMarket actively took steps to make sure insurers complied with the MFNs and took action if it saw cheaper prices offered on other price comparison websites e.g. insurers risked being delisted from ComparetheMarket.com.

The CMA has fined only ComparetheMarket and not the insurers who were party to the agreements containing the MFNs.

ComparetheMarket also refused to remove its wide MFNs from its contracts despite numerous requests from insurers

https://www.gov.uk/government/news/cma-fines-comparethemarket-17-9m-for-competition-law-breach