OFT warns of monopolistic e-commerce firms

And you thought the Internet would save you money

The Office of Fair Trading has warned that e-commerce companies are entering a monopoly position (well, oligopoly, but only economists tend to know what that means), and may soon be able to exploit their powers to rip off consumers.

While actually getting into an Internet market is relatively cheap, the huge branding efforts and customer loyalty mean that the cost of actually taking a slice of the market is extremely high. The OFT also reiterated what we all knew - that getting first to the market is a surefire way of controlling it.

According to the consumer watchdog, many online markets are natural monopolies, but on the plus side, the nature of the Internet means it can more easily check on other prices across the market from all over the world.

OFT's director general John Bridgeman said it was a matter of balancing the protection of consumers without stifling innovation. ®

Related link

The OFT report

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