OFT probes online pricing

Just a few weeks after slapping the construction industry with a record £130m fine for bid-rigging, the OFT has turned its attention to retail and announced two new reports: one into online practices, the other into the advertising of prices.

The first study, set for next spring, will look at how companies use information about consumers' web habits to tailor prices and target online advertising; while the second, due out in the summer, will delve into the potentially ‘misleading' advertising of deals, both online and offline.

Recession-battered retailers won't be too chuffed with the news, but given online traders have been operating without any particularly stringent regulation for a decade now, the only real surprise here is that such an investigation didn't come sooner.

Indeed, it's the first time the OFT has looked into internet goings-on, and while it's usually pretty gung-ho about wading into these investigations it hasn't actually started waving its fists at anyone in particular. Maybe it's learnt its lesson from the underwhelming findings of the Rip-off Britain campaign a few years back and opted for a more considered approach.

Web advertising certainly seems to be getting increasingly canny, if still a little flawed. These days you can easily find yourself with a stream of links flashing across your inbox offering discount on boot polish, and it'll take ages before you realise that such a random product is being flagged up to you just because you sent one email taking the mickey out of David Beckham's new incongruously-coloured beard.

When it comes to pricing, some of the practices do sound a little dubious. Take ‘baiting sales', where only some products are available at the discount price and customers end up paying full-whack for something else. As the name suggests, it's the retail equivalent of chasing the tasty worm and suddenly finding yourself with a hook through your mouth, writhing around on the floor of a boat as someone smashes you over the head with a stone.

But it has to be said it's not just the customers who are taking a battering. It's been a tough year for retailers, both online and offline, and having the OFT sniffing around certainly won't cheer them up. But if the investigations end up dissuading shoppers from parting with their cash online and luring them back to the nets of the high-street retailers, then at least some of them will be happy.

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