Out-Law News 3 min. read

OFT attacks practices of Ordnance Survey

Some Government bodies charge too much for commercial use of public data and deal on unfair terms, according to a damning report from the Office of Fair Trading which says the practices cost the UK economy half a billion pounds a year.

The OFT's market study into the Commercial Use of Public Information was published today, and suggests that more competition in public sector information could double its value to the UK economy to £1 billion a year, and benefit consumers by providing a wider range of competitively priced goods and services.

Examples of public sector information include weather observations collected by the Met Office, records held by The National Archives used by the public to trace their family history, and mapping data collated by Ordnance Survey (OS). The underlying raw information is vital for businesses wanting to make value-added products and services such as in-car satellite navigation systems.

Public sector information holders (PSIHs) are usually the only source for much of this raw data, and although some make this available to businesses for free, others charge. OS makes the most of all, with an income of £100 million. The Met Office is in second place, with an income of £90 million.

Generally, the report found that raw information is not as easily available as it should be, licensing arrangements are restrictive, prices are not always linked to costs and public sector information holders (PSIHs) may be charging higher prices to competing businesses and giving them less attractive terms than their own value-added operations.

The OFT found almost one in three businesses reporting problems in dealings with OS. It noted, for example, "it does permit many of its products to be distributed on terms under which distributors are able to compete with OS’s direct product offering."

Google, which runs the Google Maps service, and Multimap.com are among the licensees of OS. Both companies declined to comment on their dealings with OS. But another company that went public in criticising OS is Intelligent Addressing. It made a formal complaint to the Office of Public Sector Information (OPSI) in April this year about negotiations with OS. It described them as lengthy and said that OS introduced new levels of licensing complexity at various stages of the negotiations, indicating a lack of transparency.

OPSI's investigation report, published in July, stated that the terms of the OS licence unnecessarily restricted the way in which an OS product called AddressPoint could be re-used. OPSI concluded that by producing a restrictive AddressPoint licence, OS was acting unfairly. Its findings are being appealed.

The OFT report has also found that much of the legislation and guidance which aims to ensure access to information is provided on an equal basis, lacks clarity and is inadequately monitored. As a result the full benefits of public sector information are not being realised, said the OFT.

It concludes that PSIHs should make as much public sector information available as possible for commercial use or re-use. They should also provide access to information where the PSIH is the only supplier on an equal basis to all businesses and the PSIH itself; and prices should be proportionate to costs.

The report stops short of saying that information should be given away. It notes that "providing information free of charge would solve competition problems concerning unequal access to unrefined information because it would be open to all to use or re-use as they wished"; and that it would give businesses "increased incentives to invest in new products and services which may not have been viable otherwise." But the OFT also accepts that "the major PSIHs are largely dependent on the income from re-use to finance their operations."

"If they were unable to raise money in this way," observes the OFT, "then the level of public funding they receive would need to be increased." The report suggests that a fuller assessment of whether PSI should be provided free is best carried out by Central Government.

Locus, an association that exists to lobby for a healthy and competitive private sector in relation to public sector information, welcomed today's OFT report.

"The OFT have done a fantastic job in uncovering the detailed difficulties in a very difficult marketplace," said Chairman Richard Pawlyn. Locus members joined forces because they felt "outgunned and unable to compete with their information suppliers because they were Government monopolies," according to Pawlyn.

But Pawlyn does not want the information to suddenly become free. "The point about the economic opportunity is not how free [the information] is in monetary payment but how freely reusable it is. "

Pawlyn said that current terms for the supply of information are inconsistent and difficult to identify. "We don't campaign for it to be free but to be high quality and in the marketplace at a predictable price so no one player gets an unfair benefit. "

The OFT did find some examples of PSIHs working well with businesses, such as the British Geological Survey making core samples and field notebooks accessible to businesses producing their own mapping products. Also, the Met Office ensures that it charges the same price for weather observations to competing businesses as to its own weather forecasting operations. However, these cases were not found to be typical.

John Fingleton, OFT Chief Executive said: "This is ground-breaking work for the OFT, looking at hidden markets in the economy. These monopoly public sector bodies cost the UK economy £500 million in lost opportunities. Our recommendations will help to make this valuable public asset more easily available for commercial uses which will benefit the economy and consumers."

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