On behalf of Ofcom, E.CA and Gregory Crawford empirically analysed the impact of BT’s automatically renewable contracts on customer switching behaviour between telecom providers. Accounting for a variety of confounding factors, including tenure, bundling, price discounts and self-selection into contracts, it was found that households on automatically renewable contracts switch 35% less often than comparable households on standard contracts. In light of these findings Ofcom decided to prohibit these contracts in the fixed-line voice and boradband sectors for residential and small-business customers.

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