Oftel AND OFT PUBLISH STUDY ON E-COMMERCE

Ref: 25/00 Joint 1
Date 17 April 2000

A study of issues that could affect the development of e-commerce in the UK has been published today by Oftel and the OFT.

The consultation, entitled "Competition in e-commerce" is in response to the Government PIU report "e-commerce@its.best.uk". The report asked Oftel and the OFT to identify any emerging barriers to competition in electronic markets and make recommendations to ensure that they are addressed.

In the near future it is anticipated that people will access the Internet at much higher speeds and use a range of devices other than PCs to carry out e-commerce transactions. The study looks at the way markets are likely to develop as a result and at how companies could evolve to take advantage of these new technologies.

Preliminary conclusions of today’s study include:

• the growth of e-commerce is likely to be shaped in the next few years by the increase of ‘unmetered’ Internet access, the development of higher bandwidth access and new access devices including Internet-enabled phones and set-top boxes.

• Technological developments point towards convergence, vertical integration and further consolidation being the key themes in the market over the coming years.

• Access to networks and platforms, standards and intellectual property rights are likely to be the key e-commerce related issues for competition and regulatory authorities.

• Regular assessments of the market, ‘co-regulation’ between regulators and industry and powers and guidelines to stop anti-competitive behaviour will play an important role in fostering competition.

Oftel and the OFT are inviting comments on the study, and will produce a final report this Summer.

David Edmonds Director General of Telecommunications said today:

"For e-commerce to develop in the UK to its full potential, it is vital that companies, and small businesses in particular, can take full advantage of new technologies to provide innovative services to customers.

"Competition in the mechanisms through which e-commerce will be delivered is key to achieving this aim. This will ensure that both businesses and home users enjoy maximum choice of e-commerce services through the medium of their choosing at competitive prices."

Margaret Bloom, the OFT’s Director, Competition Policy, added:

"Today’s study promotes the primary objective of both OFT and Oftel which is to ensure the consumer receives maximum benefit from new e-commerce developments.

"We will however take action where necessary to prevent anti-competitive behaviour whilst promoting innovation and competition in the e-commerce marketplace."

The OFT has commissioned two other studies on: whether the established competition policy methodologies are applicable to the assessment of retail e-commerce markets and: market definition.

The OFT is also working with other bodies to promote a secure web environment where consumers can easily identify trustworthy businesses working to high standards of consumer care.

The study does not address issues such as consumer information, security and encryption, which are being looked at elsewhere in Government.

Note for Editors

The joint study is available on both Oftel and OFT websites – www.oftel.gov.uk or www.oft.gov.uk. Hard copies are available to the media from Oftel’s Press Office (tel: 020 7634 8991) and to the public from Oftel’s Research and Intelligence Unit (tel: 020 7634 8761).