CMA highlights benefits of digital comparison tools

The Competition and Markets Authority (CMA) has published a paper on its market study into digital comparison tools (DCTs), exploring the tools’ increasing use in helping people decide what to buy.

DCTs range from price comparison websites to smartphone apps, and are used to compare products and services on quality and price, to help customers decide whether to switch suppliers.

The CMA report unveiled that overall DCT users think these tools work well, making it easier to make informed choices and save money. Although DCTs are still a relatively new way of purchasing, the survey indicates that consumers are generally confident in the way they use them, and many use more than one site. The majority consider that individual DCTs do not feature all of the suppliers in each market.

The CMA’s survey indicated that in the past year 84 per cent of people looking for car insurance used a comparison site; 67 per cent looking for energy; and 52 per cent for broadband.

The survey found that only 11 per cent of recent users believed that sites covered all suppliers, and that 64 per cent of people using a DCT visited more than one site. Many consumers use DCTs for research, with 44 per cent of those who didn’t buy directly through a DCT saying that they used the information they had gathered from a DCT to help them negotiate a better deal with a provider.

The CMA also identified four areas of concern, these included: whether sites could be more transparent – for instance in their market coverage and business models, and in their treatment of personal data; whether the benefits that DCTs can offer could be further improved if suppliers made more information available; certain practices and contractual arrangements that could limit healthy competition between DCTs; and the way DCTs are regulated.

Andrea Coscelli, CMA acting chief executive, explained: “Our work so far suggests that digital tools like price comparison websites generally work well for consumers, who really value the service they provide. However, our report suggests that improvements may be necessary to help more people get even better deals.

“Among the areas we wish to consider further are what can be done to increase confidence among consumers and how to improve competition, regulation and transparency in the sector. We are now seeking further views on these issues as part of our wide-ranging market study.”

The CMA is seeking further views on these as it continues the study.

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