Corporate report

Digital Comparison Tools Market Study

Published 25 November 2016

Recommendations

Recommendations to companies (suppliers and DCT businesses)

(1) All DCTs should follow the CARE principles to treat people fairly by being Clear, Accurate, Responsible and Easy to use, in order to help them to comply with the law and to support consumer trust – including by:

• making clear to consumers how they protect their personal information and how consumers can control its use
• taking steps to ensure their websites and apps comply with their obligations under relevant equality law

(2) We recommend DCTs and relevant consumer and charitable organisations work more closely on how to address vulnerable consumers’ needs – including providing links to sources of additional help and support.

(3) We recommend DCTs work with sector regulators and suppliers to improve the effectiveness of quality metrics in order to mitigate against the risk of hollowing-out (a reduction of product quality as a result of undue focus on price).

(4) We will keep MFNs, non brand-bidding, negative matching and non-resolicitation agreements under review. Companies operating DCTs or supplying services via DCTs should review their contracts in light of our comments on these agreements.

Recommendations to government

(5) BEIS: We reiterate our previous recommendation to government that it introduce civil fining powers for breaches of consumer protection law.

(6) BEIS and DCMS: We recommend that the government look to bring intermediaries like DCTs into regulators’ scope in energy and telecoms.

(7) DCMS: We recommend the government consider how to maximise the opportunities presented by the General Data Protection Regulation (GDPR) to use data portability to support competition between intermediaries such as DCTs.

Recommendations to sector regulators

All regulators

(8) We recommend all regulators have regard to the CARE principles when assessing compliance with the law by all DCTs in their sectors, including apps and collective switchers as well as PCWs.

(9) We recommend sector regulators continue to work together to ensure that they take a consistent approach to DCTs where appropriate, for example through the UK Regulators Network.

(10) We recommend sector regulators consider ways to free up more data and make it easier for consumers to use DCTs, in order to support more consumer engagement and better informed choice.

(11) We recommend sector regulators look to work with DCTs and suppliers to improve the effectiveness of quality metrics in order to mitigate against the risk of hollowing-out (a reduction of product quality as a result of an undue focus on price).

FCA

(12) We recommend all regulators, but the FCA in particular given the amount of information required from consumers to generate a quote, consider whether and how it would be possible to make it easier for people to get quotes from multiple DCTs, in order to support effective DCT competition.

(13) We recommend that the FCA consider ways to build on its existing work to facilitate accurate like-for-like comparison that incorporates non-price factors.

(14) We recommend the FCA consider the issue of how insurance providers and DCTs capture consumer preferences on excesses, how this is used in generating a quotation and how it is subsequently presented; and how this may affect consumers’ choice of insurance products.

Ofgem and Ofcom

(15) Pending any legislative change, we recommend that regulators consider a number of improvements to the voluntary schemes in energy and telecoms – particularly removing the most distorting requirements such as on coverage – and in general paring back the more prescriptive requirements.

(16) We recommend Ofgem consider how it could make comparison more accurate and easier by supporting better access to consumer usage and tariff data, building on its existing work.

(17) We strongly support Ofcom’s existing initiative to make more data available for use by third parties like DCTs, including using its Digital Economy Act powers.

(18) We recommend Ofcom consider how else it might support the further development of DCTs in telecoms as a way of enabling better competition and consumer choice.

ICO

(19) Once data protection and electronic privacy reforms are in place, we recommend that the ICO review the practices of DCTs in relation to data protection.

Charities and consumer bodies

(20) We ask that regulators, relevant charities and consumer bodies help spread our messages on how people should use DCTs.

(21) We recommend DCTs and relevant consumer and charitable organisations work more closely on how to address vulnerable consumers’ needs – including providing links to sources of additional help and support.

Response

• government: in December 2017, the Department for Business, Energy and Industrial Strategy (BEIS), responding on behalf of the government (PDF, 426KB), welcomed the publication of the report and noted that more is needed to ensure the benefits of DCTs are felt as widely as possible. It confirmed that the government agreed with the recommendation in relation to civil fining powers and would seek to introduce these powers when opportunity allows. A full government response will be given to the CMA’s recommendations in spring 2018
• recommendations to sector regulators (see the Annual Report on Concurrency 2018 for further details)
• UKRN: The UKRN is helping to facilitate the collective work being undertaken by Ofcom, Ofgem, FCA, CAA and Ofwat to address the general recommendations for sector regulators in the report as well as supporting those regulators to which specific recommendations were addressed. It has formed a project team to take this forward
• FCA: The FCA has ongoing responsibilities to regulate DCTs that are authorised by the FCA and it is considering its future DCT supervisory strategy. It will have regard to the CARE principles in the course of its supervisory work; and it offers support and advice to firms, including DCTs, if they have genuinely ground-breaking or different offerings that offer a good prospect of identifiable consumer benefits
• Ofgem: Ofgem’s work on future supply market arrangements includes considering issues around access to data and the increasing role intermediaries can play in the market to support consumers. It is also considering what an appropriate future protection framework might look like
• Ofcom: Ofcom will consider the CMA’s specific recommendations when it next reviews its accreditation scheme. Ofcom has engaged informally with some non-accredited DCTs to discuss how they might better reflect the CARE principles. Ofcom is working with operators to make information on broadband speeds available to DCTs and is also exploring ways to make mobile coverage data available. It has improved the information available to consumers about the quality of telecoms services and this is available for DCTs to use