Price comparison site Comparethemarket might be keeping the cost of home insurance premiums artificially high, according to the competition watchdog.
In a provisional finding, the Competition and Markets Authority (CMA) accused the company of using contracts with insurers to stop them advertising more cheaply elsewhere.
As a result, it said the site could be breaking the law.
Comparethemarket said it was disappointed by the CMA’s finding.
It said it would work with the regulator to ensure a satisfactory outcome.
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As a result of the contracts, the CMA said customers could be missing out on lower cost home insurance policies.
Comparethemarket now faces a fine of up to 10% of its turnover.
“Our investigation has provisionally found that Compare the Market has broken the law by preventing home insurers from offering lower prices elsewhere,” said CMA chief executive, Andrea Coscelli.
“This could result in people paying higher premiums than they need to.”
The CMA conceded that Comparethemarket had contacted insurers at the end of last year to say that the relevant clauses in the contracts would not be enforced.
However, it said it was still concerned that the distortional effects might continue.
The CMA will now wait to hear a response from Comparethemarket before deciding whether to impose a fine.