Oil companies price fixing trial starts today

The Commerce Commission’s case alleging price fixing by oil companies Caltex (NZ) Limited, Mobil Oil New Zealand Limited and Shell New Zealand Limited goes to trial in the Auckland High Court today (Monday August 30).

Commission Acting Chairman Mark Berry said that the trial is expected to take at least two weeks.

The Commission filed its statement of claim in September 1997. It alleges that the three companies breached the Commerce Act by agreeing to remove a discount off the price of fuel at more than 50 petrol stations in Auckland. The discount was a free car wash for customers spending $20 or more on fuel.

Caltex and Mobil applied unsuccessfully to the High Court to have the Commission’s case struck out. In March last year Justice Sian Elias gave her decision rejecting the companies’ arguments that the statement of claim did not include enough detail and that the alleged arrangement or understanding did not amount to price fixing as described in the Act.

Caltex and Mobil then appealed Justice Elias’s decision to the Court of Appeal. The Court of Appeal heard the companies’ appeal in September last year, and rejected it for the reasons set out in Justice Elias’s decision.

Background

Section 30 of the Commerce Act prohibits price fixing, i.e. collusion among competitors over pricing issues. It applies to arrangements about all elements of a price—not just to the final retail price. It includes arrangements about “… any discount, allowance, rebate or credit …”.

This case is before the Court and is sub judice. The Commission will make no further comment about it.

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