The UK's anti-trust watchdog has provisionally found that Experian's takeover of ClearScore is likely to weaken competition in the credit reporting sector and have a negative effect on the services offered to customers.
The Competition and Markets Authority (CMA) referred the proposed £275 million takeover of ClearScore by Experian for an in-depth Phase 2 investigation in July, following initial fears the deal could results in UK consumers ultimately paying more for credit cards and loans.
As the two largest credit checking firms in the UK, the CMA believes that the affect of taking one of the firms out of the market would be to substantially reduce the pressure to continue to develop innovative offers and to make other improvements in services.
Becky O’Connor, personal finance specialist at investment house Royal London, says: “Credit scoring agencies are the gatekeepers to financial well-being. People rely on their credit scores for major life events such as buying a home, through to being approved for a car loan or even something as fundamental as a bank account. So ensuring competition and innovation in this market is about much more than profit margins, it’s about making sure people can still access the financial services that they have come to depend on, at the best possible rates.”
The CMA is now asking for views on these provisional findings by 19 December 2018.
Potential remedies could include a ruling to sell off parts of the merged company's business or an ultimate sanction to quash the deal. The statutory deadline for the CMA’s final report is 11 March 2019.