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The Office of Fair Trading or OFT is a UK statutory body established by the Fair Trading Act 1973, which enforces both consumer protection and competition law, acting as the UK's economic regulator. The OFT's goal is to make markets work well for consumers, ensuring vigorous competition between fair dealing businesses and prohibiting unfair practices such as rogue trading, scams and cartels. Its role was modified and its powers changed with the Enterprise Act 2002.

Contents 1 OFT activities 1.1 Studies into how markets are working 1.2 Communication to explain and improve awareness and understanding 2 Structure 2.1 Competition Enforcement 2.2 Consumer Regulation Enforcement 2.3 Markets and Policy Initiatives 3 The OFT and Microsoft monopoly 4 The OFT and credit card charges 5 References 6 See also 7 External links

The OFT investigates markets to see whether they are working well for consumers. As far as business conducting is concerned, studies cover some government laws and regulations to ensure a competitive environment. Where appropriate, studies will lead to market investigation references to the Competition Commission, to enforcement action, consumer awareness campaigns or to recommendations to government, which will be published.

Showing how competitive markets that work well are important for consumers, fair dealing businesses and economic performance; explaining its decisions transparently; promoting compliance by explaining to business what the law is and how the OFT will apply it; promoting consumer awareness and confidence; coordinating effectively with enforcement partners locally, nationally and internationally, and advising government on how to achieve the most effective regime for competition and consumers.

The OFT has three main operational areas: Competition Enforcement, Consumer Regulation Enforcement and Markets and Policies Initiatives.

• Enforces European Community and UK competition laws including Articles 81 and 82 of the EC Treaty and the Competition Act 1998;
• Stops cartels and other damaging anti-competitive agreements
• Stops any abuse of a dominant market position
• Investigates qualifying mergers under the Enterprise Act 2002
• Promotes a strong competitive culture across a wide range of markets
• Informs business, through a widespread education programme, about changes in legislation
• Works with the European Commission and national competition authorities of other EU Member States on Article 81 and Article 82 cases

• ensures that consumer legislation and regulations are properly enforced
• takes action against unfair traders
• encourages codes of practice and standards
• offers a range of information to help consumers understand their rights and make good choices
• liaisons closely with other regulatory bodies that also have enforcement powers.

Based on expanded powers granted under the Enterprise Act 2002, the OFT explores how different market sectors operate, in order to help markets work well. They may research one particular market in detail or, for example, how codes of practice or professional rules operate across different markets in a range of businesses. The results of the research, which are published, help the OFT to assess what action, if any, needs to be taken to protect consumers' interests. They may recommend stronger enforcement, or a change in the regulations, or suggest an awareness raising campaign for consumers (but will not always recommend intervention and when this is the case, will ensure that any non-intervention decision is well-informed and open to public scrutiny).

In 2006, the OFT restructured in response to Treasury proposals for splitting the department into separate consumer and competition regulators. The OFT argued that to protect consumers effectively, it had to be able to use both consumer law and competition law approaches in a holistic fashion. Moving away from division by legislative area, the OFT created divisions based on market sector - Services, Goods and Infrastructure- with officials specialising in the different legal and regulatory regimes working closely together in each of the three market sectors. These officials are supported by a dedicated economics branch (the Office of the Chief Economist), legal specialist and a policy advisory branch.

The OFT has received a number of complaints^[1] about Microsoft, who has a dominate position in the operating systems (OS) market and other software markets. A dominant position is defined as 40% (with exemptions) and 50% (with no exemptions),^[2] IDC figures^[3] give Windows 96% of the OS market. Of the remaining 4%, 2.3% (Mac OS) and 1.7% (Linux) most will soon be running on x86 computers. The reason the OFT give for not starting an investigation is that it would take too much money and time, even though the FT claims the European Union's efforts had a maximum of 6 people^[4] working on it at any one time. The OFT did start a token investigation into per processor licensing in schools, to help the government bargain with Microsoft, the OFT quietly dropped the investigation.^[5] (Although it should be noted that under UK competition law, a dominant position alone is not illegal; the OFT would need evidence of an abuse of that position).The OFT say that they have had no "official" complaints, the distinction between a complaint and a "official" one is undefined.

In 2006 the OFT investigated the charges being imposed on customers of credit card companies. In its report, the OFT confirmed these charges were unlawful as they amounted to a penalty, rather than the actual losses suffered by the companies. It said it would be prepared to investigate any charge over £12, indicating that £12 would not be a "fair and acceptable charge" itself. The OFT said it would be up to a court to determine such an amount based on the established legal precedent that the only recoverable cost would be actual costs incurred, i.e. liquidated damages.

The credit card companies did not produce evidence of their actual costs to the OFT, instead insisting their charges are in line with clear policy and information provided to customers^{[citation needed]}. Charges have been as much as £38 per item, which campaigners argue^{[citation needed]} is well beyond the cost of sending a computerised letter.

1. ^ Freedom of Information act request found 195 contacts with the OFT about Microsoft^{[citation needed]}
2. ^ OFT website
3. ^ OSDL website
4. ^ Financial Times
5. ^ Ian Lynch (who complained) on uk.comp.os.linux http://groups.google.co.uk/group/uk.comp.os.linux/browse_thread/thread/15cb8ac3fe7febb4/353797fd05f930f4?lnk=st&q=&rnum=1

• Annual percentage rate
• Competition law
• Competition policy
• Competition regulator
• Consumers' Association
• Consumer protection
• Consumer credit licence
• Merger control
• SSNIP
• UK default charges controversy

• Office of Fair Trading