The UK Competition Commissioner has found that comparethemarket.com violates antitrust laws because of its agreements with insurers, which can lead to higher costs for consumers.
Following an investigation, the Competition and Markets Authority provisionally found that the contracts included in the price comparison website included so-called "most favored nation clauses".
Home insurers have been found to offer lower prices on competing sites and other channels, which means fewer options for customers.
For the time being, we have found that clauses in some of ComparetheMarket's contracts with home insurers violate competition law, which could lead to higher prices for customers. For more information, see https://t.co/4E2LcqZj5w pic.twitter.com/wIAAyUDRRJ
– Competition & Markets Authority (@CMAgovUK) 2 November 2018
This also meant that home insurance companies were more likely to pay higher commission rates on comparison sites, with the additional costs possibly being passed on to the customer, according to the CMA.
CMA chief executive Andrea Coscelli said: "More than 20 million UK households have home insurance and more than 60% of new insurance policies are on price comparison sites. Therefore, it is important that these companies can offer their customers the best possible offers.
"Our investigation has tentatively revealed that ComparetheMarket has broken the law by preventing home insurers from offering lower prices elsewhere. This could cause people to pay higher premiums than they need to. "
The comparison website, which is famous for using meerkats Aleksandr and Sergei in their television commercials, could face up to 10% of sales as a result of the infringement.
A spokesman for comparethemarket.com said, "We are disappointed with the preliminary findings of the CMA.
"We will carefully review the evidence once we have access to it and look forward to working with the CMA in the coming months to ensure a satisfactory outcome."