The government watchdog kicked off its study into the subject last September with a request for feedback about which topics should be covered in its study.

In the results published today the OFT said “although industry self-regulation addresses some concerns about behavioural advertising, more could be done to provide consumers with better information about how their personal information is collected and used.”

It recommended that the Consumer Protection from Unfair Trading Regulations 2008 Act could apply to business practices in the area. The OFT also said that it would encourage the IAB to work with the industry to provide “clear notices” alongside behavioural adverts and information about how to opt out.

Should industry action prove ineffective, the OFT said it is working with the Information Commissioner’s Office to agree a Memorandum of Understanding to establish in which circumstances either body could take enforcement action.

Heather Clayton, senior director in the OFT’s consumer market group said: “The OFT is keen to engage with industry players and consumer groups while behavioural advertising is in its relative infancy, and before targeted pricing takes hold, so that the market develops in a way that protects consumers from bad practice. Discussions now about the potential for both benefits and harm, and how consumer protection legislation applies, will stand us in good stead in the event that industry action proves ineffective or targeted pricing becomes a reality.”