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The OFT has yesterday launched a call for information to explore the extent to which businesses are monitoring online shoppers and using the data to target them with personalised prices, and whether any action is necessary under the OFT's powers.

Some businesses monitor consumer behaviour online, collecting and recording information about individual shoppers' purchasing habits, websites they have visited and the items and services they have looked at, as well as the type of device or internet browser they use. The OFT will look at how businesses use such consumer information, including whether they change the prices they offer individual shoppers as a result.   

The OFT will  consider business and technological developments in the online shopping market, consumers' understanding of how their information is used and whether they are being treated unfairly in law as a result of any firms using this practice.

As part of its work, the OFT will be consulting with a number of its international counterparts, including the US Federal Trade Commission on commercial uses of consumer data.

Clive Maxwell, OFT Chief Executive, said:

'Innovation online is an important driver of economic growth. Our call for information forms part of our ongoing commitment to build trust in online shopping so that consumers can be confident that businesses are treating them fairly.

'We know that businesses use information about individual consumers for marketing purposes. This has some important potential benefits to consumers and firms. But the ways in which data is collected and used is evolving rapidly. It is important we understand what control shoppers have over their profile and whether firms are using shoppers' profiles to charge different prices for goods or services. This call for information will help us understand these practices better and to decide whether or not this is an issue on which the OFT needs to take any action.'    

The OFT will be gathering information over the next six months and would like to hear from interested parties including online retailers and software providers. It will publish its findings in Spring 2013.

NOTES

1. View further details on this project on the OFT website.
2. This work follows the OFT's Online Targeting of Advertising and Prices (OTAP) report published in May 2010, when it said it would keep a watching brief on this area as technology developed.
3. View further information about the FTC's work in the area of commercial uses of consumer data.
4. Conducted under section 5 of the Enterprise Act 2002, a call for information is one of the ways in which the OFT may gather information. This approach is not an alternative to a market study but responds to a need to take forward work where the OFT needs to better understand the functioning of a market or markets but requires more information to decide whether to identify the market as one which does not work well.