No appeal on oil price-fixing fines

WELLINGTON -- Oil companies have no plans to appeal price-fixing fines totalling $1.175 million.

In September 1997 the Commerce Commission charged Caltex, Mobil, and Shell with behaving anti-competitively and breaching the Commerce Act over a free-carwash promotion.

It said they conspired to remove an effective discount off petrol at more than 50 Auckland petrol stations at the end of May 1996.

The commission has previously said the free carwash, worth $2 with a $20 petrol purchase, was a valuable consideration and removing it was effectively a fuel price rise.

The ruling was delivered by Justice Salmon in the High Court in Auckland yesterday.

Caltex was fined the most - $450,000 - followed by Shell ($375,000) and Mobil ($350,000).

Commission chairman John Belgrave said it was "delighted" with the finding.

"I believe that this is the first time anywhere in the world that it has been proved that a group of major oil companies acted anti-competitively over the price of petrol," Mr Belgrave said.

"There have been successful cases against individual oil companies but not against a group of major companies."

The Automobile Association said the fines would only exacerbate public cynicism over petrol prices.

Shell spokesman Antonius Papaspiropoulos said the company accepted the ruling and would not appeal.

"Shell is committed to learning from this isolated case," Mr Papaspiropoulos said. "We have already taken steps to ensure we do not get into this position again."

A Caltex spokesman said that company regretted the episode and had no plans to appeal.

Mobil spokeswoman Rowan Macrae said it was "highly unlikely" to appeal.

Caltex received the heaviest penalty because it initiated the action and did not co-operate with the commission, the judge said in his decision.

"Each of the other two defendants offered some co-operation, Mobil to a slightly greater extent than Shell."

Justice Salmon also found some witnesses tried to cover up what they had done and had lied when answering questions put by the commission and the court.

He accepted Mobil and Shell had taken extensive steps to educate their employees about the provisions of the Commerce Act.

Caltex had also acted to educate their employees, but not as extensively as the other two companies.

"I accept that each of the three companies has done everything practicable since the 1996 events to ensure such behaviour does not occur again," Justice Salmon said.

Justice Salmon reserved a decision on costs.

He said the three defendants could provide written submissions within 14 days.

The commission would have a further seven days to respond

Link

http://www.press.co.nz/2000/07/000216n26.htm

-- Carl Jenkins (Somewherepress@aol.com), February 16, 2000

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-- (kb8um8@yahoo.com), February 16, 2000.