Office of Fair Trading to look at online advertising

Internet has led to big changes in advertising and marketing practices

Phorm's technology has proved controversial

The Office of Fair Trading (OFT) is to conduct a market study looking at the impact on consumers from potentially misleading advertising and pricing of goods and services, with a particular focus on the internet.

The watchdog will evaluate which online and offline pricing and advertising practices have potential to be most detrimental to consumers. It will also look at the practice of behavioural advertising – targeting adverts according to people's web surfing habits.

Heather Clayton, senior director of the OFT's Consumer Market Group, asked business and consumer groups to come forward with suggestions for areas the study should examine.

"The way that businesses advertise and price goods and services constantly evolves, and we need to keep up to date on how consumers view these adverts, and the types of advertising and prices which may mislead," she said.

Increased use of the internet has introduced new pricing and advertising practices such as controversial targeting technology Phorm. The web has also changed the scope for harm from existing practices, for example by making it easier to find and compare alternative offers on price comparison web sites.

The OFT has already said the study will look at pricing tactics where consumers only see an element of price upfront, "baiting" sales which entice consumers with promises of discounts but then have very few items on offer at the sale price, and complex pricing online where it is difficult for consumers to assess a final price.

The market study is expected to commence in the autumn, and comments are invited before 18 September.