The Competition and Markets Authority’s (CMA) Phase 2 investigation has provisionally found that Experian’s takeover of ClearScore is likely to result in less intense competition, potentially harming the development of digital personal finance products.

The CMA referred the proposed merger between the credit score checking firms for a more in-depth investigation in July, 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 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 them 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, stated the CMA. By taking one of the firms out of the market, it found that the merger would substantially reduce the pressure to continue developing innovative offers and improve services.

Roland Green, the inquiry chair, said: “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 findings by 19 December 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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