Out-Law / Your Daily Need-To-Know

Aggregator needs daily evidence to make price comparisons fair, rules ad regulator

Out-Law News | 14 May 2009 | 8:58 am | 2 min. read

Price aggregating websites that want to claim that they compare more suppliers than anyone else must conduct research to make sure it is true and must update that research frequently, the advertising regulator has said.

The Advertising Standards Authority (ASA) has ruled that a website must keep daily records of the number of price comparisons it makes if it is going to make claims about its comparisons in advertising.

Companies need data that are detailed and robust on the number of supplier comparisons made to get the best quote for customers because the price comparison market was so "dynamic", it said.

Aggregator Gocompare.com claimed in Google sponsored links and a television advert that it compared prices from more car insurance providers than anyone else. Competitor Moneysupermarket.com challenged that assertion in a complaint to the ASA, saying that it compared more providers than Gocompare.

Gocompare said that it checked its marketing claims every three months to ensure they were true, but the ASA said that in the fast-moving world of price comparison this was not enough.

"The ASA understood that the market for price comparison sites was relatively dynamic and the number of car insurance providers each site compared could change frequently over the course of a month," said its ruling. "We considered that, to show they compared more car insurance companies than any of their competitors, as the ads implied, Gocompare needed to demonstrate that they provided a higher number of quotes each month on average for a sustained period of time."

Instead, what Gocompare produced to substantiate its claims were daily reports of the number of insurance companies it compared every day and a snapshot of how many providers Moneysupermarket compared on a randomly chosen day in each of the three months in question.

The company also conducted some market research which it said showed that it compared more quotes than Monesupermarket.

The ASA said that Moneysupermarket also submitted information to back its own assertions, and that it was left with a clash of evidence.

"Moneysupermarket submitted a monthly breakdown of their own car insurance provider counts against Gocompare's, which did not corroborate those figures but instead indicated that Moneysupermarket compared quotes from more car insurance providers than Gocompare between August and November 2008," it said. "We were therefore unable to tell whether Gocompare or Moneysupermarket had compared the most providers from August to November 2008."

"Although we considered that Gocompare's claims would have been substantiated if they had been able to show they had compared more providers than their competitors in every month on average from June to November 2008, we were unable to determine whether that was the case," said its ruling. "Although they had compared the most quotes in June and July 2008, we considered two months were insufficient to substantiate the claims. We concluded that the claims were likely to mislead."

Gocompare must produce daily comparison figures with screenshots as proof that they compare more sources of insurance than a competitor if they want to make that claim in the future. It was told not to repeat the adverts.