Experian’s £275m takeover of credit check rival thrown into doubt
The Competition and Markets Authority has expressed ‘concern’ over Nottingham-based Experian’s takeover of ClearScore.
The CMA said Experian’s takeover of start-up rival ClearScore could “stifle product development and impact customers”.
The CMA’s Phase 2 investigation has provisionally found that Experian’s takeover of ClearScore is “likely to result in less intense competition, potentially harming the continued development of digital products which help people understand their personal finances”.
The CMA referred the proposed merger between credit score checking firms Experian and ClearScore for an in-depth Phase 2 investigation in July 2018, following initial concerns that the deal could have a negative impact on the services provided to customers.
Blenheim Chalcot initially revealed it was to sell its fintech business ClearScore, to Nottingham-based Experian for £275m in March.
Experian and ClearScore are the two largest credit checking firms in the UK. Experian offers both free and paid-for credit checking services, while ClearScore, which entered the market in 2015, quickly became market leader in free credit checking tools for customers. Both companies also provide people using these services with comparisons of third party lenders such as credit card providers and banks.
The CMA says that competition between the two firms is helping to drive quality and innovation in both free and paid-for credit checking services as they develop their products to vie for customers. By taking one of the firms out of the market, the CMA’s provisional finding is that the merger would substantially reduce the pressure to continue to develop innovative offers and to make other improvements in services.
Roland Green, the Inquiry chair, said: “Our investigation has shown that this is a fast-paced and evolving market, and that both Experian and ClearScore are an important part of that.
“The provisional findings in our investigation show that Experian’s proposed takeover of ClearScore is likely to weaken competition in the sector and have a negative effect on the services offered to customers.”
A spokesperson for Experian said: “Experian is disappointed by the Provisional Findings published today by the UK Competition and Markets Authority. We continue to strongly believe that the acquisition of ClearScore will have a positive impact on competition, allowing Experian to help more consumers with their finances by providing greater choice and convenience to them to access personal finance products at the best prices.
“We also believe we will be able innovate more and better through the combination of the parties’ complementary assets and innovation cultures. We will continue to engage constructively with the CMA over the weeks ahead to seek to address its concerns ahead of publication of the CMA’s final report early in the new year.”
The CMA is now asking for views on these provisional findings by 19 December 2018 and will assess all the evidence before making a final decision. The statutory deadline for the CMA’s final report is 11 March 2019.
