Andrea Coscelli, Claudio Pollack, May 20, 2011
This paper discusses Ofcom’s current activities related to consumer protection and empowerment. It describes our approach and framework for analysis, and goes on to examine those areas we currently treat as our top priorities. We do so by exploring the following questions:
- What is the role of consumer policy?
- What do we mean by consumer protection and empowerment?
- What issues have given rise to concerns in our recent experience?
- What tools do we have to improve consumer outcomes, taking
- account of the impact of market mechanisms and the role of
- incentives?
- What is the evidence of the effectiveness of our approach to date?
We also briefly discuss our proposed intervention against the sale of automatically renewable contracts to purchasers of fixed voice and fixed broadband services. Our protection and empowerment work complements our competition work as it addresses areas where markets without dominant providers are not functioning perfectly for consumers in terms of their ability to compare and switch providers easily as well as to negotiate, understand, and enforce contracts. As the OFT states “markets work well when there are efficient interactions on both the demand (consumer) and supply (firm) side. On the demand side, confident consumers activate competition by making well-informed and well-reasoned decisions which reward those firms which best satisfy their needs.” In addition to our powers using regulations and our work with industry, we also discuss the scope for incorporating greater use of comparative information and behavioral economics to improve market outcomes and reduce consumer harm.
