The OFT has launched two separate studies into online pricing and advertising practices.

The Office of Fair Trading (OFT) has today (15 October) launched two separate market studies into online pricing and advertising.

The two separate studies aim to investigate the potentially misleading pricing practices online.

The first study will look at targeted advertising and customised pricing, including tailoring prices individually using information collected about a consumer’s internet use.

The second study will look into how some pricing practices could potentially mislead consumers, focusing primarily on how these practices are used online.

Both these studies will be completed by the summer 2010.

Some of the practices being investigated are drip pricing, baiting sales and reference prices, all of which can sometimes be found used on comparison websites.

Drip pricing is when fees and charges are added cumulatively through the purchasing process. Baiting sales is used when only few discounted products are available to draw visitors in and they are then encouraged to buy the product at the full price.

The reference pricing practice means artificially inflating the product’s pre-sale price in order to make any subsequent discounts look like a better deal.

Heather Clayton, OFT Senior Director, said: “These studies will ensure that we keep up to date with the latest developments and, in particular, on how new pricing and advertising practises are emerging and evolving online.

“It is very important that the OFT’s approach to potentially misleading practices remains well-informed by a sound evidence base, so we effectively protect consumers while allowing firms to compete freely.”