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The Kelsey Report® Advisory

U.K. OFT Gives Lesson in The Law of Unintended Consequences
Charles Laughlin , 4/6/2005

SUMMARY: Britains Office of Fair Trading issued a statement on April 5 that it would request that the nations Competition Commission begin an investigation into the U.K. classified directories market. The OFT made the recommendation based on its conclusion that the competition that has emerged recently in the U.K. directories market has not produced results that satisfy the agency. The agency appears to want highly distributed market share, less profitable market leaders and less expensive advertising choices for small businesses.

Since 2001, the OFT has placed Yell Group, the market leader, under a strict rate cap, equal to the rate of inflation (known as the retail price index, or RPI) less 6 percent. From 1996 to 2001, the rate cap was RPI less 2 percent. The OFTs announcement does not guarantee a renewal of the rate cap, nor does it suggest that a rollback is very likely.

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This published material is for internal client use only. It may not be duplicated or distributed in any manner not permitted by contract. Any unauthorized distribution could result in termination of the client relationship, fines and other civil or criminal penalties under Federal law. The Kelsey Group disclaims all warranties regarding the accuracy of the information herein and similarly disclaims any liability for direct, indirect or consequential damages that may result from the use or interpretation of this information.

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