The study will investigate whether businesses comply with the regulations in place for selling over the internet. It will also look at levels of consumer confidence and whether buyers are aware of their rights when shopping online.
Four main areas will be looked at - airline tickets, domestic electrical goods, music (including downloads) and online auctions.
At the moment, 130,000 businesses sell online and internet sales account for 2.5 per cent of the retail market.
OFT chief executive John Fingleton said: 'The internet is fast becoming a hugely important channel for consumers and businesses. Its rapid evolution means that we need to ensure that the consumer protection regime gives existing and future users the confidence to realise the internet's potential for shopping.'
The OFT expects to publish the results in spring 2007.
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