The Australian Competition and Consumer Commission (ACCC) today released its report into the comparator website industry in Australia, which examines how the industry operates, and identifies challenges and benefits for both consumers and businesses.

“Comparator websites can drive competition and deliver significant savings and other benefits to consumers, but any new industry may have a few bad apples,” ACCC Deputy Chair Delia Rickard said.

“Emerging issues in the online marketplace are an ACCC priority, and players in the comparator website industry are on notice that we are watching. Anyone that comes across concerning conduct within the industry is encouraged to report it to the ACCC.”

Consumer and business complaints have led to the ACCC previously taking enforcement action and securing penalties against comparator websites for misleading consumers.

“Comparator websites can assist consumers to make more informed purchasing decisions when comparing what are often quite complex products, and can promote healthy competition by assisting small or new service providers to compete more effectively,” Ms Rickard said.

“However, the ACCC is concerned that poor conduct by some industry participants may undermine these benefits and mislead consumers. Lack of transparency is central to these concerns – both in terms of ‘front-of-shop’ and ‘out-the-back’ activities.”

ACCC concerns centre on a lack of transparency in regards to the:

  • extent of the comparison service, including market coverage
  • savings achieved by using the comparison service
  • comparison services being unbiased, impartial or independent
  • value rankings
  • undisclosed commercial relationships affecting recommendations to consumers
  • content and quality assurance of product information.

The ACCC consulted with over 20 stakeholders including industry, other regulators and consumer groups, and utilised topical research.

Early next year, the ACCC will be releasing best practice guidelines to assist comparator website operators and businesses to comply with Australia’s competition and consumer protection laws. The ACCC will also provide consumer guidance on how to check that they are comparing apples with apples.

The ACCC had previously secured over $2 million in penalties against comparator website EnergyWatch for misleading advertising related to representations about the nature of the Energy Watch service and the savings consumers would make by switching energy retailers through the Energy Watch service.

Compare The Market Pty Ltd paid a penalty of $10,200 following the issue of an infringement notice by the ACCC in relation to claims made in recent advertising promoting Compare the Market’s health insurance comparison service.

See also: The comparator website industry in Australia.