OFT recommends competition commission review Yellow Pages undertakings

98/12 26 October 2012

The Office of Fair Trading has found that undertakings given by Yell Group plc (now known as hibu plc) relating to its Yellow Pages business, may no longer be appropriate, and is recommending that the Competition Commission consider releasing the company from them.

hibu plc gave the undertakings in 2007 after a Competition Commission market investigation found that the company's market power meant that prices for classified advertising in the Yellow Pages were higher than they would have been in a well-functioning market. These undertakings include:

Yellow Pages advertisement rates are subject to a cap.
Restrictions apply to hibu's ability to publish second tier directories and themed guides.
hibu is required to provide to the OFT a comprehensive advertising rate card, as well as accounts relating to its printed regulated directory business.

In line with its duty under the Enterprise Act 2002, the OFT has reviewed these undertakings to consider whether they are still appropriate.

In August 2012, the OFT opened a public consultation on its provisional findings. While it heard differing opinions about the potential effects of releasing hibu from these undertakings, the OFT is of the view that there has been a change of circumstances because the growth in internet usage by both consumers and advertisers has led to suppliers of printed classified directories facing a broader range of competitive constraints.

Nisha Arora, Director in the OFT's Services, Infrastructure and Public Markets Group, said:

'We have found that the market has undergone a change of circumstances and it is now for the Competition Commission to decide whether hibu should be released from these undertakings agreed in 2007.'

NOTES

Download the OFT's findings. On 27 July 2012, Yell Group plc changed its name to hibu plc. For the purposes of this report, given that Yell Group plc gave undertakings to the Competition Commission in 2007, it should be noted that references to Yell refer now to hibu plc.
The Competition Commission's Classified Directory Advertising Services market investigation report and the undertakings are available on the Competition Commission website. This followed a market investigation reference by the OFT in 2005.
Under section 162 of the Enterprise Act 2002, the Office of Fair Trading has a general duty to keep under review undertakings given under the Act and to consider whether, by reason of any change of circumstances, an undertaking is no longer appropriate and needs to be varied or superseded, or parties to undertakings need to be released from them. The OFT shall give such advice to the Competition Commission as it considers appropriate in relation to any possible variation or release from such undertakings.
It is for the Competition Commission to decide on any changes to the undertakings, based on the OFT's advice together with any additional analysis that the Competition Commission considers necessary to inform its decision.

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