CMA Discussion Paper: Smart Data and Price Transparency Schemes

The paper is intended to help policymakers understand the potential benefits of PT schemes, assess the circumstances in which these are likely to be effective, and consider how PT schemes should be designed to facilitate the benefits of competition.

Based on their learnings from the implementation of Open Banking schemes, the CMA have identified several ‘building blocks’ for the construction of effective Smart Data schemes:

In outlining the potential merits of PT schemes, the CMA have identified the example of the fuel finder scheme, which DESNZ intend to have in operation by the end of 2025. This will help consumers find the cheapest fuel, without having to physically drive between petrol stations. The process for this would be, as follows:

According to the CMA, this example demonstrates that PT schemes promote competition through emboldening consumers to compare prices and services. In turn, this should improve consumer engagement, for instance through emboldening them to switch services. The paper also considers which other information would be useful alongside price details, noting this can vary depending on the industry. For example, in the funerals market, providers are already required to publish a standardised price list for a set of common services.

Alongside this, the paper considers which markets might be better suited to PT schemes. The CMA anticipate this is best suited to markets where there are high search costs and limited up-front transparency over prices, alongside the expectation that consumers would act on price information. In particular, markets where there are high degrees of standardisation, as opposed to bespoke pricing, are well suited, and similarly as are markets where price information can be difficult to access.

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