Australia’s comparator website industry is the focus of a new report released by the Australian Competition and Consumer Commission (ACCC).
The report, which aims to identify the challenges and benefits for consumers and businesses, highlight the ACCC’s concerns of “a lack of transparency” in the industry.
“Comparator websites can drive competition and deliver significant savings and other benefits to consumers, but any new industry may have a few bad apples,” said ACCC Deputy Chair Delia Rickard.
“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.”
Ms Rickard said certain industry participants might be responsible for undermining the benefits of the industry.
The ACCC is planning to release best practice guidelines next year in an effort to assist comparators and businesses to comply with competition and consumer protection laws. The independent authority will also be providing consumers with information on how best to ensure “they are comparing apples with apples”.
“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,” said Ms Rickard.
“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.”
The ACCC’s key areas of concern relate to the extent of the comparison service, the savings achieved by the service, the assurance the service is unbiased, impartial or independent, the value rankings, the disclosure of commercial relationships affecting recommendations, and the quality of product information.
The ACCC secured over $2 million in penalties against Energy Watch in July 2012. The Federal Court ordered the company to pay $1.95 million for misleading advertising related to the company’s service and the alleged savings consumers would find if they switched energy retailers through the service. Former CEO Benjamin Polis was ordered to pay $65,000 for his voiceover role in misleading radio advertisements.