October 16, 2009

By By Andre Paine, London

The U.K. Office of Fair Trading (OFT) has launched market studies into online advertising and pricing.

The OFT, the U.K.'s consumer and competition authority, will examine online targeting of advertising and prices that incorporates behavioral advertising and customized pricing, where prices are individually tailored using information collected about a consumer's internet use. This study is due to completed by spring 2010.

Additionally, a second market study will look into advertising of online prices that may potentially mislead consumers, such as 'drip' pricing where price increments 'drip' through during the buying process, and 'reference prices,' where there is a relatively high reference price compared to a special offer sale price. The study is expected to be completed by summer 2010.

"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," said Heather Clayton, OFT senior director, in a statement. "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."

In 2000, Amazon's price discrimination techniques were revealed when users discovered that prices sometimes dropped if they deleted cookies on their computer.

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