[Article] Competition Authority drops Statoil threat

Victor

I think there had been comments on Motors that fuel prices were remarkably similar in Donegal.

http://home.eircom.net/content/irelandcom/topstories/2117700?view=Eircomnet

Competition Authority drops Statoil threat
From:ireland.com
Tuesday, 9th December, 2003

The Competition Authority has dropped a threat to take fuel company Statoil to court after the company agreed to end a price support policy for garage owners.

And last night, the Authority indicated it would pursue any other company using similar "anti-competitive" supports.

The Authority carried out a two-year investigation into Statoil's support for outlets in Letterkenny, Co Donegal. It determined that the price support agreement breached the Competition Act 2002.

Statoil last night responded angrily to the announcement of "alleged price-fixing" and "refuted" any suggestion that it had breached the Act. "Statoil discussed in detail and agreed its price-support mechanism with the then Department of Enterprise, Trade and Employment in 1996 with a view to lowering petrol prices."

However, a spokesman for the Department said such an agreement would have to have been notified to the Competition Authority, which was then a part of the Department. "I understand that no such notification ever took place," he said.

"Obviously papers from that time would have to be examined before any detailed comment could be made. However, the Department does not acknowledge the existence of any agreement with the company which would have permitted a price maintenance arrangement of the sort now objected to by the Competition Authority," the spokesman said.

The price support agreement set a "ceiling price", which was Statoil's recommended retail price and a "floor", the price charged by specific strategic rivals located nearby.

Statoil outlets dropping their price below a rival were not supported nor were those charging more than the company's recommended price.

The Competition Authority said the practice was anti-competitive. Rivals were less likely to cut their prices in search of market share knowing that Statoil would immediately match them. At the same time, there was no incentive for Statoil outlets to undercut their competitors.

Mr Paul Gorecki, director of the monopolies division of the Authority, said the outcome of the investigation should have "an impact for car owners across the country".

Although the investigation took place only in Letterkenny, Statoil has agreed to drop the practice across the State. Last night Statoil managing director in Ireland, Mr Tony Murray, said the practice reviewed by the Authority was already largely redundant under new EU rules.

However, he said the company continued to support its dealers.

"We're very annoyed at the situation and we're amazed that it came out," he said, characterising it as an attack on the integrity of the company. He said Statoil had always worked "above board".

He said the company had talked "amicably" to the Authority earlier this year and had proposed "technical changes" to the agreement, which the Authority had accepted.

The Authority states in its decision notice that Statoil's undertakings to "amend its behaviour" came after it had informed the company of its intention to initiate legal proceedings.

star gazer

Wow every business using anti-competitive practices in the country must be really worried at the verocity of the Competition Authorities' assauslt on statoil.:rolleyes:

dahamsta

TWO YEARS? Hello? Typical bloody Irish regualtory "authority". Bloody useless.

adam

sceptre

Donegal was merely the example they took. Statoil have been following the same policy all around the country (at all the Fareplay/Fairplay/whatever garages)

Victor

http://home.eircom.net/content/unison/national/2333214?view=Eircomnet

Heating oil price fixers facing cartel probe charges
From:The Irish Independent
Monday, 12th January, 2004
Brendan Keenan Group Business Editor

MORE business people are likely to face criminal charges for fixing prices as the Competition Authority and the gardaí crack down on cartels.

Around a dozen distributors of home heating oil in the west and south west will be served with summonses in the next few weeks alleging they conspired to set the price of oil for customers.

Under Irish competition law, such price-rigging is a criminal offence, carrying a maximum fine of €500,000 or two years' imprisonment for individuals, and fines up to 10pc of turnover for offending companies.

A dozen summonses will also be served against the companies involved.

The decision by the Director of Public Prosecutions to take the cases to court follows a three-year investigation by the Competition Authority, culminating in raids on the offices of several firms last February.

The powers and resources of the competition watchdog have been strengthened since the passing of new legislation in 2002.

Ireland, unusually, makes price fixing a criminal, rather than a civil, offence.

This makes it harder to prove, and the authority brought only a handful of prosecutions in its first ten years of existence.

However, two detective sergeants from the Garda Anti-Fraud Office are now working with the authority and a number of former gardaí have been hired. They bring investigative skills, but also experience in preparing suitable files for the DPP.

The authority is also using a "whistle-blower" approach, run jointly with the DPP, where someone who took part in a price cartel can be offered immunity from prosecution if they are the first to provide information.

In the current case, it is alleged that oil distributors in Mayo, Cork and Kerry took part in meetings to decide the prices they would charge.

It is widely believed that such practices have been widespread in Irish business, and that many people do not realise that they are now serious offences.

It is understood the Competition Authority spoke to several people who attended meetings at which it is alleged the fixing of prices for home heating oil was discussed, but who then declined to take part.

According to the authority's information, it is alleged that there were as many as six groups who met regularly - often on a monthly basis - to set the price of kerosene.

Gardaí are expected to serve summonses on the alleged members of the cartel in the next two weeks.

This follows the application by the DPP, James Hamilton, to four different district courts for warrants in the weeks before Christmas.

The authority has been investigating several businesses, including public houses, over allegations of price fixing.

Others, most recently the banks, have been examined to see if they are not competing with each other.

Usually industries agree to change practices rather than face action from the Competition Authority.

Statoil agreed last year to reduce its supports for petrol station operators, while disputing that it had broken the law.

There is no suggestion that it, or any other large oil company, will be charged in the current investigation, although these companies would supply oil to the distributors involved.

star gazer

According to the authority's information, it is alleged that there were as many as six groups who met regularly - often on a monthly basis - to set the price of kerosene.

As long as the competition authority only goes after the small fry, Irish consumers as a whole will wait and wait and wait for proper competitive practices in consumer markets. This token story only shows that there isn't going to be a change any time soon. Perhaps, when the reports into the professions are published the competition Authority will show it has teeth, maybe it really does, maybe.