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The OFT closed on 31 March 2014 and this website is no longer being updated. The OFT's work and responsibilities have passed to a number of different bodies. Read more.

Market review of Domestic Electrical Goods

Start date:  25 November 2010
End date: 27 June 2012

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Extended warranties comparison website

The UK's first extended warranties comparison website was launched on 10 July 2013 to help consumers to shop around and to better assess value for money. In addition to household names Dixons and Argos, which agreed to set up the website, a range of other providers have also joined the website.

For further details, and some advice to consumers when considering whether to purchase extended warranties, see press release UK’s first extended warranties price comparison website launched following OFT action (10 July 2013).

The OFT very much encourages providers not on the website to consider joining. For further information about joining, please use the contact us link on the website.

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OFT statement on Competition Appeal Tribunal Judgment - 28 March 2013

The OFT welcomes today's judgment of the Competition Appeal Tribunal (CAT), which dismissed John Lewis's application for review of aspects of the Comparison Website. The OFT will now finalise the website, which we consider will make shopping around easier and help shoppers to get a better deal, with the aim that it will go live in July 2013.

For further details see the CAT's judgment: www.catribunal.org.uk/238-7973/Judgment-.html.

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Undertakings in lieu of a market investigation reference

Following its market study (details below), and subsequent consultations with interested parties, the OFT has accepted undertakings in lieu of making a market investigation reference to the Competition Commission. The OFT considers that these undertakings will address the competition concerns identified in the market study and lead to improvements in how this market works for consumers. For more details, see:

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Market study of extended warranties

The OFT has completed a market study of extended warranties which highlighted competition concerns in the £1 billion per year extended warranties market. Dixons, Comet and Argos, the largest retail providers of extended warranties, have offered legal undertakings to improve the way that the market works. The OFT will now consult on whether to accept these undertakings, instead of referring the market to the Competition Commission for a detailed investigation. For more details, see:

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Competition Commission decision on the Domestic Electrical Goods (DEGs) Order

The OFT welcomes the Competition Commission's decision to remove the DEGs Order and undertakings following OFT advice. Following that decision, the OFT has released several parties from assurances which they had given to the OFT to comply with the DEGs Order.

In the event that any DEGs supplier unduly influences retailer pricing decisions in the future, the Competition Act 1998 now provides an effective mechanism to address this issue. There are serious consequences for any undertaking which infringes the Competition Act 1998, including the possibility of significant financial penalties.

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Review of the Domestic Electrical Goods (DEGs) Order

The OFT has completed a review of the DEGs Order and accompanying undertakings which were put in place in 1998 following a Monopolies and Mergers Commission (MMC) investigation which had raised concerns that competition between retailers was restricted. The review has found that there have been several significant changes of circumstances since the MMC reported, including the entry of new retailers and the increasing importance of the internet, which mean that the MMC's concerns are unlikely to re-emerge. In the unlikely event that they did so, the Competition Act 1998 now provides an effective mechanism to address them. For these reasons the OFT has advised the Competition Commission that the DEGs Order and undertakings are no longer appropriate.

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Aftermarkets for DEGs, including extended warranties

The OFT has launched a short market study into extended warranties for DEGs. The study will focus on whether competition for warranties is sufficiently effective to ensure consumers get value for money. This follows a review of DEGs aftermarkets where parties raised credible concerns that competition for extended warranties was restricted. The OFT intends to publish the market study in summer 2011.

However, the OFT has decided not to launch a market study into repairs of DEGs. This is because it did not receive sufficient evidence to support initial concerns that manufacturers may be restricting competition for repairs by limiting independent repairers' access to technical information and spare parts.

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Contacts

Team Leader: Dan Moore (0207 211 5828, dan.moore@oft.gsi.gov.uk)
Project Director: Susan Oxley (0207 211 8265, susan.oxley@oft.gsi.gov.uk)
Senior Responsible Officer: Ann Pope (0207 211 8786, ann.pope@oft.gsi.gov.uk)

Any media enquiries should be directed to a member of our Press Office.




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