Online Markets discussion paper FAQs

Why did the OFT commission this research?

The growth of online commerce raises a range of issues that the OFT needs to consider.  One of these issues is the potential for interdependency between small businesses and large players who supply essential services to them.

We often hear from small businesses who inform us that they are reliant on certain key suppliers of services to them whose policies and practices they don't always agree with.

It is important that whenever the OFT considers developments in a market that we understand the particular circumstances of the market as well as possible.
This research is one of a number of pieces of ongoing work that will help the OFT build its understanding of the way that online markets operate.

Why is the OFT seeking further views?

The findings of this research are largely positive: that on the whole barriers to entry online are lower than offline, that innovations tends towards openness, and that large players more often than not create new possibilities for small businesses.

However, it would not be appropriate to consider this short piece of work the final word on the matter.  Online markets are hugely diverse, and experiences will differ from market to market.  Accordingly, we are keen to hear as wide a range of views as possible - especially from small businesses - to ensure that the findings of the report apply across the board.

What kind of barriers to trading online is the OFT interested in hearing about?

If you have any general views on the findings of the report, we would encourage you to submit them to us to help us understand the issues better.

We would be particularly interested to hear from firms who have experienced circumstances in which, for example:

• you felt you had no choice but to use a particular supplier for an essential service
• a supplier imposed terms and conditions that restricted the choices available to you and you had no alternative or were locked in
• a supplier denied service to you, or threatened to deny a service, without good reason (for instance, because you priced a product below a recommended price or because they compete with you online) 

These circumstances do not necessarily imply that competition law has been broken.  If you have a specific concern about behaviour that you think may infringe competition law, you may wish to consider submitting a formal complaint.  Details of how to submit a complaint are on our website and set out in our Guidance document: Involving third parties in Competition Act investigations OFT451 (pdf 290 kb).

Does this research mean that the OFT is about to take a case against one of the large companies mentioned in the report?

The research is largely positive about the role of large players on the internet, and credits them with driving innovation and creating new opportunities.  None of its findings suggests any immediate need for OFT intervention. 

We will, however, consider any complaints we receive about market behaviour in the usual way.  All complaints are assessed on a case by case basis, and the merits of each are weighed up against competing priorities.  The full range of factors that the OFT would take into account in any decision over whether to pursue a complaint further can be found here.

What happens next?

The aim of the consultation is to further broaden our understanding of how online markets operate, and to test whether the broadly positive findings in the research apply across different markets.

The feedback that we receive on this report will form part of the intelligence we use when assessing potential problems in these markets.

As part of the development of or e-Protection strategy, we will also be asking small businesses for their views on the regulatory environment online over the coming months.

Back to: Online markets discussion paper (closed 30/09/10)