Investigate how switching sites can better serve competition
Last updated: 09:17am 24 January 2019
Conservative Party Manifesto 2017, p.59
We will investigate how switching sites can better serve competition, including by providing shoppers with information about quality of service and complaints.
Many of us use switching sites, for example to help choose a bank, car insurance or energy supplier. These digital comparison tools can affect competition by forcing businesses to improve their performance or offer better value for money in order to be more attractive to consumers.
This policy promises to investigate how switching sites can further contribute to market competition.
Switching sites have come under scrutiny for not always being transparent, prompting an inquiry by the Competition and Markets Authority (CMA), the results of which were published in September 2017. The CMA recommended that switching sites follow the CARE principle: to be clear, accurate, responsible, and easy to use.
However, that inquiry was commissioned under the previous government. Under this administration, in February 2018, Ofgem (the government regulator for gas and electricity markets) published details of plans for a new Switching Programme that will:
“enable consumers to switch their energy supplier reliably and quickly, including by the end of the next working day if they choose…”
Ofgem says it aims to complete drafting the text relating to the changes by the end of March 2019. After that, further consultation will be required before actual implementation of the programme.
The CMA is also continuing to investigate switching sites, in November 2018 issuing a “statement of objections” to ComparetheMarket, arguing that some of its contract clauses could cause customers to miss out on the best possible deals.
The Switching Programme and the CMA probe are evidence that there have been investigations into “how switching sites can better serve competition”, but they only relate to the retail energy and home insurance sectors. We’re marking this as ‘in progress’ and will be looking for efforts to investigate the use of switching sites more broadly before we consider moving it to ‘done’. Follow this policy to keep up with developments.
Investigate the details
- Digital comparison tools market study – Final report – Competition & Markets Authority
- Andrea Coscelli: staying ahead in a digital marketplace – Gov.uk
- CMA steps in to give people a better deal on comparison sites – Gov.uk
- Switching Programme – Ofgem
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