Innovation Holdings Australia Pty Ltd is set to increase its hold over the comparison website market as it looks to take up a greater share in iSelect.
Through its related bodies corporate, it owns comparison site comparethemarket.com.au, which offers services to consumers that compare financial products (including mortgages), as well as credit cards, insurance, energy and utility services.
It also is the parent company of Auto & General Insurance Company Ltd and Auto & General Holdings Pty Ltd (together, Auto & General) which underwrite and distribute home, motor and travel insurance in Australia, primarily under the brand Budget Direct.
It currently owns approximately 29 per cent of the shares of competitor comparison website iSelect, which it acquired through a series of acquisitions beginning in 2018.
However, last year, Innovation Holdings outlined that it intended to acquire up to an additional 6 per cent of the shares of iSelect.
This would take its holding to 35 per cent of shares in the ASX-listed comparison website, iSelect Ltd.
Following a review, the Australian Competition and Consumer Commission (ACCC) said it would not oppose the proposed acquisitions.
ACCC Commissioner Stephen Ridgeway commented: “We examined the acquisitions carefully, because iSelect is a major competitor to Compare the Market for comparison services.
“In some cases, even minority shareholdings in a competitor can lead to muted competition between the parties.”
According to the competition watchdog, an IHA shareholding in iSelect of up to 35 per cent would be “unlikely to substantially lessen competition” in any potential market for comparison services, including in any specific product category, such as home loans.
“We consider that IHA owning the stake in iSelect will not substantially affect competition in the market.
“Other routes to market exist for providers, including other comparison websites. There are also government websites available to consumers [for energy and health insurance] such as www.energymadeeasy.gov.au and www.privatehealth.gov.au,” Mr Ridgeway said.
The commission added that it encouraged consumers to ensure they know how comparison websites work, in particular “what providers they are actually comparing and who they are not comparing” (as they may not compare all the offers or products and services available in the market), before relying on them for products and services.
[Related: LK Group acquires InfoChoice from iSelect]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.