Bundeskartellamt sees need for action on comparison websites

Today the Bundeskartellamt presented the results of its sector inquiry into online comparison websites. The inquiry into a large number of comparison websites from the areas of travel, energy, insurance, telecommunications and financial services has in some areas confirmed the suspicions of consumer rights violations. The companies concerned will now have the possibility to comment on the consultation paper, which was published today.

Andreas Mundt, President of the Bundeskartellamt: “Online comparison websites are an important tool, provided that they deliver objective and truthful results. A large part of the comparative information is correct and reliable. However, our inquiry has also shown that consumers’ rights could be violated in a number of cases. Consumers are often not informed about the details of the ranking criteria for their search results and the comparison websites’ recommendations, which can be misleading. For example, sometimes important insurers are not included in the comparison. Hotels can buy ranking positions on hotel booking platforms. And in some cases, a comparison website covers less than 50 per cent of the offers available on the market. In short: Consumers cannot always rely on comparison websites to really find the best offer for their requirements.”

Many comparison websites provide reliable information, making it easier for consumers to make a buying decision. However, the Bundeskartellamt has information to suggest that portals also act in a way that can mislead consumers:

- The fees or commissions many suppliers pay often influence the list of results provided by the portal. Depending on the industry, offers may be pre-selected, some offers can be positioned on top of the actual ranking or the suppliers’ payments may be taken into account in the ranking as such.

- The market coverage of comparison websites is poor in some industries. In some cases, it corresponds to less than 50 per cent of all offers available in the market.

- Many comparison websites claim that their offers are limited or emphasise benefits which can hardly be obtained in practice. Some also promote allegedly exclusive offers.

- Many websites merely reproduce the data and/or calculations of other portals rather than making their own comparison.

Consumers are often not sufficiently informed about the comparison websites’ practices. If this is the case, this may mislead consumers or constitute a case of hidden advertising, which is a violation of the consumer rights regulations of the German Act Against Unfair Competition (UWG).

The Bundeskartellamt initiated a first round of enquiries, looking into general structural data of approx. 150 comparison websites from the areas of travel, energy, insurance, telecommunications and financial services. The second round of enquiries involved specific questions to a total of 36 of the most relevant comparison websites in their respective areas. The topics investigated were cooperations between the various websites, market coverage of the websites, how the rankings are formed, other factors influencing the consumers’ choice and the handling of user ratings.

In October 2017 the Bundeskartellamt started its sector inquiry on comparison websites based on its new competencies in the area of consumer protection, which it has held since mid-2017 (see press release of 24 Oktober 2017). The Bundeskartellamt can carry out investigations in the area of consumer protection and thus identify shortcomings. However, it does not yet have the power to eliminate the violations of rights it detects by official decree (see press release of 12 June 2017).

The consultation paper presented today details the outcome of the Bundeskartellamt’s investigations and contains an initial legal assessment. The market players concerned and other interested parties can comment on the paper until 4 February 2019. After assessing the comments the Bundeskartellamt is going to publish a conclusive report on its sector inquiry on comparison websites in 2019.