The online car portal carwow, which links customers with dealers for the purchase of vehicles, complained to the Competition and Markets Authority (the “CMA”) last year that BMW UK was preventing its dealers from listing BMW and MINI vehicles on carwow. Carwow asked the CMA to investigate whether BMW’s policy amounted to an infringement of competition law. Following an initial assessment, the CMA met with carwow and BMW UK, and the latter subsequently informed the CMA that it had decided to reverse its policy and allow dealers to work with carwow and other online car portals. As a result of the change in policy, the CMA decided not to open a formal investigation.
Digital comparison tools allow customers to compare products and services on quality and pricing and help customers to make informed decisions. The use of digital comparison tools is growing as a result of the growth of internet commerce. However there are concerns that restrictions on internet commerce can breach competition law. For example, restricting dealers from using internet platforms or online comparison sites can amount to a ban on passive sales, which is considered to be a serious infringement of competition law.
The CMA launched a market study in relation to digital comparison tools more generally last year, as we reported here. On 28 March this year, the CMA published an update paper on its market study. Andrea Coscelli, CMA Acting Chief Executive, stated: “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.” The areas of possible concern identified by the CMA are as follows:
- whether sites could be more transparent, for example in relation to their market coverage and business models;
- whether the benefits of digital comparison tools could be increased if suppliers made more information available;
- certain practices and contractual arrangements that could limit healthy competition between digital comparison tools; and
- the way in which digital comparison tools are regulated.
The CMA will continue its market study and publish a final report by 28 September.
If you would like to discuss any issues relating to e-commerce please do not hesitate to contact our competition team.