Date of reference: 5 April 2005
The OFT carried out a seven-month study into the market and the effect of undertakings.. These placed a cap on advertising prices in Yellow Pages and a restriction on the publication of local Yellow Pages directories in order to address concerns about high prices and the undermining of effective competition.
The OFT has referred the classified advertising services market to the Competition Commission (CC) for investigation. The OFT has continued concerns that competition in the market is not operating effectively. The structure of the market remains highly concentrated with Yellow Pages and Thomson Local directories accounting for over 90 per cent of supply in the UK: barriers to entry are high due to strong branding and network effects. Profits appear high and there seems limited competitive pressure on prices. While there has been some new entry to the market - notably, British Telecommunications re-entered the market in 2003 - the OFT does not believe recent entrants have strengthened competition to a material degree.
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