The OFT is to review the specific competition regulatory rules relating to the sale of domestic electrical goods in the UK. In parallel it will also consider a possible market study into warranties and repairs in the sector. Domestic electrical goods are considered to be an important part of the UK economy (with consumers spending £23 billion in 2009) and that these have become an essential part of everyone's everyday lives.
The OFT plans to focus its work on 'white' goods such as washing machines, dishwashers and fridges, and 'brown' goods such as TVs, DVD players and audio equipment. 'Grey' goods such as computers are to be excluded from the review.
Following an investigation by the Monopolies and Mergers Commission ('MMC') in 1997 (now the Competition Commission), an Order for the sector was introduced and undertakings were obtained to prevent suppliers of certain brown and white goods from recommending resale prices and to limit their ability to refuse to supply dealers.
Since the MMC investigation, however, new high street and online traders have entered the market and there has been significant product innovation. Part of the object of the review is to consider whether the specific competition regulation, set by the Order and undertakings, remains appropriate in the light of these and other changes.
At the same time the OFT is seeking comments on competition in the 'aftermarkets' for domestic electrical goods which include extended warranties and out of warranty servicing and repairs. This follows claims that independent repairers have problems getting access to the technical information and original spare parts they need to compete. The OFT is asking for evidence of this and any resulting loss to consumers, to decide whether it should examine these issues further.
The OFT has emphasised that it is undertaking a holistic review of the domestic electrical goods sector, as opposed to a more formal market study, although a market study is a potential outcome. An update on whether to proceed with a market study in relation to aftermarkets is expected in the New Year. A decision on the review of the Order and undertakings is expected by the end of summer 2011.
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