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OFT to Investigate Online Data Tracking

The OFT is asking for information about how ecommerce firms use consumer behavior data they gather through their websites

It was observed many retailers track the activities of customers on their online platforms and can collect a wide variety of data, ranging from past purchasing habits and the type of items viewed to which web browser individuals are using. The OFT is set to examine how organizations use this vast amount of information and whether some people will see different prices as a result.

Chief executive of the body Clive Maxwell said that innovation online plays a key role in driving economic growth and the new investigation is part of the OFT's commitment to ensuring that consumers can have confidence their personal details will not be used to treat them unfairly. This will be important in building consumer trust in the sector and encouraging further ecommerce sales.

While he stated the collection of consumer data can bring many benefits to both retailers and customers - for example by allowing firms to improve their marketing by delivering targeted offers - it is essential that businesses are not misusing such information.

Mr Maxwell said: "The ways in which data is collected and used is evolving rapidly. It is important we understand what control shoppers have over their profile and whether firms are using shoppers' profiles to charge different prices for goods or services."

Interested parties, including online retailers and software providers, have been encouraged to offer their views on the issue, with the OFT accepting responses for the next six months. Throughout the period, the body will be working closely with a number of its counterparts in other countries, such as the US Federal Trade Commission, to build its understanding of the commercial uses of customer data.

It added: "The OFT will consider business and technological developments in the online shopping market, consumers' understanding of how their information is used and whether they are being treated unfairly in law as a result of any firms using this practice." The organisation's findings will be published in spring 2013, at which time it will confirm whether or not this is an issue that warrants further action.

The announcement comes shortly after body wrote to 62 of the country's leading ecommerce retailers, following an examination of 156 websites that found signs many businesses are not fully complying with consumer protection laws.

It found that a third of ecommerce firms impose unreasonable restrictions on consumers' rights to a refund if they opt to cancel an order. In particular, many firms require that returned items be in their original packaging, which the OFT said can infringe on an individual's right to examine their goods.

Six out of ten ecommerce websites also did not provide adequate provisions for customers to contact them, while a quarter of companies imposed unexpected extra charges at the final stage of the checkout procedure without making this clear beforehand.

More Stories By Dominic Monkhouse

Dominic Monkhouse joined PEER 1 Hosting as managing director of the company's new UK operations in January, 2009, bringing more than 14 years of IT industry experience to the team. He is the key executive responsible for building and growing PEER 1 Hosting's expansion into Europe. In his role as managing director, Dominic is responsible for sales, marketing and service delivery across PEER 1 Hosting's UK business and ensuring overall customer satisfaction. His role is integral to the company's continued commitment to customer service.

Before joining PEER 1 Hosting, Dominic served as managing director of IT Lab, where he was able to quickly transform the company into the fastest growing IT service provider in the UK SME market. Prior to IT Lab, he was managing director of Rackspace, which grew from a staff of four to 150 under his guidance.

Dominic has a Bachelor of Science in Agricultural and Food Marketing from Newcastle University and a MBA from Sheffield Business School in the UK. He frequently participates in public speaking events on the topic of creating great places to work and achieving continuous client satisfaction. He also is involved as a judge of the Sunday Times Customer Experience Awards.