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Online advertising and pricing to come under investigation

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The Office of Fair Trading (OFT) has said that it intends to monitor the pricing and advertising policies of firms that sell on the internet.

One area the OFT will be examining is the way that firms shape and tailor prices around the information that they hold on consumers’ internet use.

Other pricing activities that will come under scrutiny include the proliferation of three-for-two offers that make it hard to calculate the actual price of the individual items, and drip pricing, where extra charges and supplements are tagged on during the buying process.

Baiting sales, where only some products are available at a discounted price and shoppers may end up buying a full priced item, will likewise be examined, as will reference prices, where the pre-sale price of an item is inflated to give the impression of a large saving.

The OFT will additionally look at time-limited offers, such as sales that finish at the end of the month or special prices that are available for one day only.

Heather Clayton, the OFT’s senior director, said: “These studies will ensure that we keep up to date with the latest developments and, in particular, on how new pricing and advertising practices are emerging and evolving online.

“It is very important that the OFT’s approach to potentially misleading practices remains well-informed by a sound evidence base, so we effectively protect consumers while allowing firms to compete freely.”

It is expected that the study will be completed by the summer of next year.