Competition: ACCC claims petrol price collusion - August 2014

Filed under: Australian Politics, Competition,

The Australian Competition and Consumer Commission has launched proceedings in the Federal Court against Informed Sources (Australia) Pty Ltd and several petrol retailers alleging that they contravened section 45 of the Competition and Consumer Act.

The Commission alleges that a price information sharing arrangement between Informed Sources and the petrol retailers allowed those retailers to communicate with each other about their prices, and that these arrangements had the effect or likely effect of substantially lessening competition in markets for the sale of petrol.

Subscribers to the Informed Sources service provide pricing data to Informed Sources at frequent, regular intervals and in return receive from it collated data from the other subscribers, and various reports containing pricing information across particular regions.

The petrol retailers who are joined in the ACCC’s proceedings are BP Australia, Caltex Australia, Coles Express, Woolworths and 7-Eleven.

“The ACCC alleges that the arrangements were likely to increase retail petrol price coordination and cooperation, and were likely to decrease competitive rivalry,” ACCC chairman Rod Sims said.

“Given the importance of price competition in petrol retailing, the ACCC is concerned that consumers may be paying more for petrol as a result.

“The ACCC alleges that fuel retailers can use, and have used, the Informed Sources service as a near real time communication device in relation to petrol pricing. In particular, it is alleged that retailers can propose a price increase to their competitors and monitor the response to it.

“If, for example, the response is not sufficient, they can quickly withdraw the proposal and may punish competitors that have not accepted the proposed increased price,” Mr Sims said.

The competition provisions of the Competition and Consumer Act prohibit contracts, arrangements or understandings that have the purpose, effect or likely effect of substantially lessening competition.

The proceedings follow an extensive investigation by the ACCC into price information sharing arrangements in the retail petrol industry.

The ACCC is seeking declarations, injunctions, pecuniary penalties and costs.

This matter is listed for a directions hearing in Melbourne on 26 September 2014.

This is the second matter the ACCC has taken to court this year dealing with the fuel sector. The first was the shopper docket proceedings, where the ACCC took action to ensure that Coles and Woolworths complied with undertakings to limit the level of discounts connected to supermarket purchases.

Further Reading