Italy - Italian Competition Authority: Comparison Websites Of Car Insurance Policies Will Display More Complete And Transparent Information – No Opt-Out Mechanism For Optional Covers

On the 8th of April 2015 the Italian Competition Authority closed a formal investigation and has made legally binding the commitments presented by traders managing two comparison websites, Facile.It and 6Sicuro.it, that allow consumers to compare car insurance policies and to buy them through their web sites.

These proceedings were opened on October 2014, in order to investigate possible unfair commercial practises, concerning:

a) the lack of transparency of information included in comparison tools websites with respect to: their business model, with specific reference to their source of income, since they act as brokers for insurance companies and, as a consequence, the potential impartiality of the comparison mechanism;
b) the lack of information about the coverage of the comparison (name  and/or , total market share of the insurance firms included in the comparison) and the ranking criteria;
c) possible misleading claims concerning savings advertised by the comparison tool: it was not clear whether those savings could be obtained simply through the use of the comparison websites or were in fact already offered by the insurance companies, sometimes under specific conditions;
d) the “opt-out” mechanism for optional covers: the  comparison results - sometimes and for some insurance companies only – included covers such as third party liability, fire and car theft insurance, even when the consumer asked for car insurance only (mandatory by law). Sometimes, the results even included optional covers different from those asked by the consumer.

The Italian Authority opened these proceedings because the described conducts could qualify as misleading information and omission and allegedly infringed articles 6 and 7 of the EU Unfair Commercial Practices Directive (UCPD), as transposed into articles 21 and 22 of the Italian Consumer Code. In fact, the lack of transparency about the characteristics of the service, the real source of the savings advertised on comparison tools, and the lack of information on the actual insurance firms included in the comparison could deceive the average consumer, and cause him to take a transactional decision that he would not have taken otherwise.

Moreover, the lack of transparency concerning the economic incentives of the traders, that receive, for each policy sold, a fee - differing among companies and also depending on the additional covers sold - is likely to deceive consumers about the impartiality of the comparison tool.

Finally, the “opt out” provisions on additional covers and the inclusion in the comparison results of policies which have not been requested by the consumer, might alter the ranking, thus inducing consumers to choose those companies and policies which ensure more profits for the comparison tool itself, distorting consumers’ economic choices.

To address the concerns stated by the Authority in starting the proceedings, parties offered commitments  which include the following proposals:

a) to provide detailed information on the website about: the business model of the comparison tool, also disclosing the names of the insurance companies that have commercial agreements with the website; the companies which are included in the comparison and their total market share; the fees gained from each insurance company;
b) to provide more transparent information on the website on how savings are calculated (either when they derive from a mere comparison between competitors and when they  stem from specific tariffs applied by the comparison website);
c) to offer additional and optional covers only through an opt in mechanism.

The Italian Competition Authority accepted the commitments proposed by the parties and, as set by the procedural rules, made them mandatory and did not assess whether the conducts infringed the Consumer Code. Comparison tool traders are also required to publish for 90 days the full text of the commitments on the home page of their websites. The final decision has stressed the important role that car insurance comparison tools might play for the competitive dynamics of this sector, since their transparency and impartiality can be particularly beneficial for consumers.

The full text in Italian of the decisions, including the commitments, can be found on the Authority’s website:
http://www.agcm.it/stampa/news/7636-siti-di-comparazione-delle-polizze-rc-auto-impegni-vincolanti-per-facileit-e-6sicuro.html