The UK Competition Commission reports on CDAS market
The Competition Commission (CC) has published its final report into the printed classified directories market. Yell, the publisher of Yellow Pages, will be required to comply with a number of restrictions, including a price control of RPI 6 per cent until March 2008 and RPI from that date onwards.
The final report concludes that Yell has market power as a result of its strong brand and network effects. Prices have been largely constrained by the existing price cap rather than competition. Were it not for the price cap, customers of Yell would be paying more for advertisements in Yellow Pages than they would if the market was functioning well.
Frontier (London) advised BT, the publisher of The Phone Book and one of the two competitors to Yell throughout the course of the inquiry.
The CC found that whilst BT's entry into the market offers the prospect of stronger competition to Yell, the pace of its future growth is unclear and the extent to which its presence will translate into a significant constraint on Yell's prices remains uncertain. The CC expects that advertising on the Internet will increase in the future and that printed directory advertising may decrease. At present, however, limited numbers of customers are switching their spend from printed directories to the Internet and classified directories revenues have continued to increase over the last five years.
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