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Bundeskartellamt published the final report on its inquiry into comparison websites

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Christian Fernsby | Monday April 15, 2019 4:22AM ET
Bundeskartellamt
Europe   The Bundeskartellamt can carry out investigations in the area of consumers

The Federal Cartel Office, Germany's national competition regulator, Bundeskartellamt, has published the final report on its inquiry into comparison websites.


In October 2017 the Bundeskartellamt started the sector inquiry on comparison websites based on its new competencies in the area of consumer protection, which it has held since mid-2017.

The Bundeskartellamt can carry out investigations in the area of consumer protection.

However, it does not yet have the power to eliminate the violations of rights it detects by official decree.

While in some sectors, the degree of the websites’ market coverage is very high, in particular in the insurance and hotel industries, some key providers are not included in the comparison. There are only a few websites which handle this piece of key information in a way that is sufficiently transparent for the consumer, e.g. by providing a negative list.

When it comes to hotel rankings, the amount of commission paid by the different hotels is one of the factors influencing a hotel’s position in the ranking. Consumers may find it misleading if the websites give the impression that their rankings are equivalent to recommendations, even if there is some superficial or hidden information on the fact that the amount of commissions paid has an impact on the ranking results.

In the energy sector in particular, some websites leave out certain offers in their initial rankings, either because they may be to the disadvantage of consumers, or because the website does not receive a commission from the providers. Consumers are not informed if the latter is the case.

Comparison websites for energy and telecommunications tariffs often display selected offers above the actual ranking (“position 0”). In some cases the providers pay for this position, and the consumers are not informed about the fact that the offers displayed at this position are in fact advertisements.

Sometimes the websites indicate shortages, benefits or exclusive offers in a misleading manner that may put consumers under pressure or raise false expectations, especially in the travel sector, but also in other industries.

In the sectors under review, most ratings were exclusively given by users who had successfully concluded a transaction via the website, which one the one hand makes it more difficult to enter fake reviews, but on the other hand also reduces the range of ratings.

Comparison websites of all sectors cooperate in terms of databases and calculator tools. It is true that such cooperations can extend consumers’ opportunities to compare offers, but they can also mislead consumers into interpreting identical results on several allegedly independent websites as a confirmation.

In some cases consumers are misled, transparency obligations are violated or advertisements are not indicated as such.

 

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