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OFT consults on Market studies guidance

53/09    12 May 2009

The OFT is consulting on a proposed revision to its guidance on how it conducts market studies.

Download Market studies guidance (pdf 216 kb)

Market studies are examinations into markets which may not be working well for consumers. They consider if there are problems that are causing detriment to consumers and, if there are, how those problems might be addressed. The proposed changes to the OFT's 2004 guidance:

• explain that the OFT's prioritisation principles apply when making the decision to select a market for study
• makes clear the OFT's commitment to transparency and engagement with stakeholders affected by the studies, and
• explain how the OFT evaluates market studies.

The consultation is open until 4 August and gives stakeholders the opportunity to provide views and comments on the revised guidance.

Recent OFT market studies have examined sectors such as homebuilding, airports, payment protection insurance, sale and rentback and personal current accounts.

OFT Senior Director of Policy Ali Nikpay said:

'Market studies are a powerful and effective tool for looking at markets, linking both competition and consumer work. Ideas for market studies come from a wide variety of sources, both external and internal. I hope the revised guidance will provide greater clarity around when and how such studies are undertaken.'
 
NOTES

1. Market studies can recommend self-regulation by an industry, recommendations to Government to change regulations to improve competition or consumer protection, as well as other action such as consumer information campaigns to encourage better purchasing decisions. They may also lead to a market being referred to the Competition Commission for further investigation.

2. The revision of the 2004 market studies guidance Market Studies: Guidance on the OFT approach follows an internal review in 2007 of the OFT's market studies work, and an OFT market studies conference in June 2008.

3. Market studies are conducted under the OFT's general function under section 5 of the Enterprise Act 2002, which includes the functions of obtaining information and conducting research.

4. The 2001 White Paper, A World Class Competition Regime anticipated and encouraged the use of market studies, providing for competition authorities to advise on the impact on competition of laws and regulations, and committing the Government to consider the advice received and to respond setting out its intentions within 90 days of receiving a report.

5. Following a consultation, the OFT published its prioritisation principles in October 2008. Download OFT Prioritisation Principles (pdf 120 kb) 

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