The Competition and Markets Authority (CMA) has published its concern that 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.

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 the 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.

Currently, 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.”

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.

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