In May 2018 Experian announced their intent to acquire Clear Score, which is an innovative UK consumer organization which matches individuals to personal financial products, offering free credit reports, scores and personal financial education, both online and through mobile devices. The U.K. Competition and Markets Authority says the acquisition would likely mean less competition.
The U.K. Competition and Markets Authority said that its Phase 2 investigation has provisionally found that Experian plc’s (EXPN.L) 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.
Roland Green, the Inquiry Chair, said, ‘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.’
Meanwhile, Experian said that it is disappointed by the Provisional Findings published by the UK Competition and Markets Authority or ‘CMA’. The company continues 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.
Experian said it 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 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.
The CMA said Experian and ClearScore are the 2 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.
Editorial comment: It is interesting to note that the U.K. competition authority believes Experian and ClearScore are in the same business and by combining them would lessen competition. In the U.K. Experian is a credit bureau, while ClearScore is akin to a Fintech company, which relies on credit scores (which could be sourced from any credit bureau) to match consumers to available financing. Fintech companies are quite prolific, new ones appear almost monthly. Fintechs could be compared with the nine-headed Hydra from the Greek mythology. If you cut off one head two more grow in its place. Applied to this case it would result in more competition rather than less. The U.K. market already has many more ‘credit checkers’, (a term used commonly in the U.K.), much more than in any other markets. So why are the U.K. competitive authorities worried about a negative competitive impact.