In the run up to criminalisation of cartels, a story in today’s Waikato Times caught our eye. The reporter complains that 10% of petrol stations surveyed refused to divulge their prices although the prices were displayed on the forecourt.
Among the reasons offered was that it was against company policy or against the law to share this information. The newspaper then went to the Commerce Commission, which contradicted the companies and said there was nothing to prevent them giving the price.
The Commission may be technically correct but, in our view, could have been much more supportive of the attempts by the companies to draw some bright lines for their forecourt attendants to follow.
The legal position
New Zealand has legislation in the House to criminalise cartel conduct. The oil companies will also be aware of a recent and high profile cartel investigation in Australia prompted by the fact that some petrol stations had been phoning each other to check prices. The allegation was ultimately unsuccessful, but it took litigation to get there.
Australia is moving to outlaw price signalling between competitors in defined industry sectors, beginning with the banking sector but also likely to be extended to the retail petrol sector. Among other things, this outlaws public disclosure or “signalling” of any information relating to pricing. Chapman Tripp’s commentary on this issue can be accessed here.
Responsible compliance procedures
No doubt what has happened here is that the petrol retailers have – responsibly – instructed their staff to be careful about giving price details over the phone to anyone unless they are confident that the person is not associated with a competing company.
Such instructions tend to draw a bright line so that front line staff are not expected to make fine judgements about when it is appropriate to provide the information sought and when it is not.
This is exactly the sort of proactive compliance behaviour that the Commerce Commission should be encouraging. So, while the Commission is right that there was nothing preventing the petrol stations from giving the price over the phone, a more nuanced response which acknowledged the companies, and their forecourt attendants, were being appropriately conservative would have been both fairer to the people involved and more educative of the general public.
The Commission and the media called for criminalisation of cartels. We hope they also recognise and support attempts by businesses to put in place compliance policies to meet those concerns.