OFT to investigate firms' use of consumer data

For example, on Twitter, a disgruntled Ryanair customer claimed that he looked up a fare on a particular day, which was £123. The next day he checked the fare again and it had risen to £237. Once he had "flushed cookies" (essentially causing the website to forget his previous visits) the fare returned to £123, he said.

An ICO spokesperson told Computing that just like the rules regarding loyalty cards, if an organisation was using cookies to track a user's online activity with a view to targeting them with a price for a product based on their browsing habits, then it would need to provide sufficient information about how cookies are used in that process.

The OFT will look at how businesses use such consumer information, including whether they change the prices they offer individual shoppers as a result

It said that it would 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 new data analytics practices.

The OFT said it will consult with a number of its international counterparts including the US Federal Trade Commission on commercial uses of consumer data.

Over the next six months the OFT will try to gather as much information on the issue as possible and is encouraging interested parties including online retailers and software providers to come forward. It will publish its findings in spring 2013.

"Innovation online is an important driver of economic growth. Our call for information forms part of our ongoing commitment to build trust in online shopping so that consumers can be confident that businesses are treating them fairly," Maxwell added.