OFT calls for greater transparency for online businesses

The Office of Fair Trading (OFT) is writing to over 60 leading online businesses to ensure they are transparent with consumers about how they collect and use their data.

The letters coincide with publication of the OFT’s Personalised Pricing report which looks at how consumers’ information, stored in places such as internet cookies, is used by online firms to influence prices.

The report found no evidence that retailers use information collected about individuals to offer higher prices to specific customers – a concern that had been raised. However, many retailers do use consumers’ information to shape their pricing or place advertisements relevant to their interests. For example, retailers may offer discounts to those who came to a product via a price comparison website. Overall, such targeted pricing can offer benefits to customers, according to the report.

Despite this, the OFT has found that many consumers are uneasy with the range of personal information collected about them and the selling of this information to third parties – and also have little understanding of how online businesses get or use their information or of the steps they can take to protect their privacy.

Many of the websites examined by the OFT during the research did not make it clear what information they collected about consumers, how it would be used or how users of their websites could opt out of data collection. Others did not allow access to their pages without forcing users to accept their privacy policy – providing no option to opt-out.

The OFT is concerned this could lead to a loss of trust in traders and their business practices. To address this, the OFT is reminding businesses to: give consumers accurate, honest and clear details about how they, and third parties, collect and use their information; give consumers a genuine chance to opt-out of non-essential collection and use of their data; make sure their privacy terms and conditions are fair.