Catie Low, 17 December 2015
7-Eleven revealed on Wednesday it was in mediation with the competition watchdog over its subscription to petrol price information sharing service Informed Sources, the same day Coles Express made public its decision to quit the service from April next year.
A spokesman for 7-Eleven said mediation was just one of the options available to the retailer and that matters in relation to the court proceedings remained “on foot”.
7-Eleven, which is currently mired in a worker exploitation scandal, earned almost $200 million from fuel sales from its network in the past financial year.
Informed Sources provides real-time fuel price updates from participating retailers and a platform for the competing vendors to signal their price intentions to each other, according to the Australian Competition and Consumer Commission.
The ACCC alleges theses “arrangements have the effect of likely effect of substantially lessening competition in markets for the sale of petrol in Melbourne”.
Coles is the second fuel retailer to quit the Brisbane-based Informed Sources, after the ACCC accepted a court enforceable undertaking from Mobil Oil Australia in August 2014 not to subscribe to the service for a period of five years.
The settlement with Mobil came a week after the ACCC instituted proceedings against the price information sharing service and a number of petrol retailers, including Woolworths, Caltex Australia Petroleum, BP Australia and 7-Eleven, alleging they contravened section 45 of the Competition and Consumer Act.
The matter is listed for a trial in February 2016.
Coles Express is the first high-profile fuel vendor to agree to quit service, which relies on the participation of the big petrol vendors to be effective.
It’s understood the settlement between Coles Express and the ACCC over its subscription to Informed Sources did not include any penalties or an admission of guilt from the Wesfarmers-owned chain.
A spokesman for Coles Express said the retailer had settled with the ACCC in the “interests of avoiding a prolonged court process”.
ACCC chairman Rod Sims said the watchdog’s concern was that the fuel pricing data was used by the fuel vendors to communicate pricing plans.
“The prices are very cyclical, they go up and they go down unlike any other commodity and it’s usually someone who is a subscriber to Informed Sources who leads them up and it’s usually someone who is not a subscriber to Informed Sources who leads them down,” Mr Sims said.
Critics of the ACCC action claim the fuel retailers could collate the data collected by Informed Sources themselves because it’s already freely available to any market watcher.
But Mr Sims alleges the problem with the service isn’t the data, it’s that all the players are watching the prices, together.
“It’s not just that everyone can see your price every 15 minutes, it’s that you know they can and so every 15 minutes you can see what others are doing, you know they are watching what you’re doing,” Mr Sims said.
“If I’m individually finding out the prices to set my price that’s one thing but I’m not seeing what everybody else is seeing.”
Mr Sims said Coles Express’ decision to withdraw from Informed Sources was an extremely positive step towards increasing competition in the petrol market.
“I welcome and appreciate the decision of Coles Express to cease using the Informed Sources information sharing service at the earliest available opportunity and without the need to go to a court hearing,” Mr Sims said.
“The ACCC considers this to be an extremely positive step towards increasing competition in the petrol market and is pleased to see this independent initiative by Coles Express.”
Extracted in full from the Sydney Morning Herald.