UK government looks at Internet shopping

27th Apr 2006

A new fact-finding study into online shopping has been launched by the UK Office of Fair Trading.
Around 130,000 UK businesses now sell online, in a market
representing about 2.5 percent of all household spending (over £18
billion a year in total).

In the last five years, internet retail
sales in the UK rose by over 350 percent, compared with growth of
only 20 percent for all retail sales. In 2005, the typical online
shopper spent £560 online, and forecasts suggest that this could grow
to over £860 per year by 2010 (see note 5). Other research has,
however, also identified consumer concerns when shopping online about
security of payment, or potential problems with delivery.

The study will explore consumer confidence in this area and, in
particular, whether the current consumer protection regime meets any
new challenges raised by this mode of selling. It will examine
- consumers are confident when shopping on the Internet
- consumers receive the right level of regulatory protection
- consumers are aware of their rights when shopping online; and
- businesses understand and comply with the regulations for online

The study will concentrate on four representative “case study”
sectors: domestic electrical goods, music sales (including
downloads), airline ticket sales (including accommodation bought at
the same time), and online auctions. These sectors have been chosen
because they represent at least a third of all online spending (see
note 6) and are good examples of the internet as a growing and
developing marketplace. It is also anticipated that these sectors
will provide useful lessons to apply to other areas of internet

Throughout the course of the study the OFT will consult widely with
businesses, trade bodies, consumer groups and public sector
organisations. It will also research consumer and business
perceptions and needs, enforcement practice, and consider
international experience in this area.


John Fingleton, Chief Executive of the OFT, said:
‘The Internet is fast becoming a hugely important channel for
consumers and businesses. Its rapid evolution means that we need to
ensure that the consumer protection regime gives current and future
users the confidence to realise the internet’s potential for
shopping.  This study is core to the OFT’s mission to make markets
work well for consumers.  The OFT is committed to looking proactively
at identifying and addressing new and future challenges, so as to
ensure that consumers and the economy benefit from the innovation and
choice that the internet can offer.’



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