The competition watchdog has launched legal proceedings in the Federal Court against petrol price comparison website Informed Sources and BP, Caltex, Coles Express, Woolworths and 7-Eleven.
The Australian Competition and Consumer Commission alleges the use of the website by the service stations allows them to monitor and respond to each others prices on an almost real time basis.
The Informed Sources website operates through the servos providing regular pricing data to it and in return providing collated data and reports containing pricing information across particular regions.
ACCC chairman Rod Sims said the arrangements are likely to increase retail petrol price coordination and cooperation and decrease competitive rivalry.
“Given the importance of price competition in petrol retailing, the ACCC is concerned that consumers may be paying more for petrol as a result,” Sims said in a statement.
The proceedings follow an investigation by the ACCC into price information sharing arrangements in the retail petrol industry.
The competition watchdog is seeking declarations, penalties and costs.
Founder of Informed Sources, Alan Cadd, told SmartCompany the ACCC is unfairly targeting a small privately owned business.
“Informed Sources turns over in one year about as much as an average service station, we turn over in one year about what any one of our clients turns over in 8 hours, we are tiny,” he says.
“They have come to us and said the service and company you have put 27 years of your life into, we want you to close it down.”
Cadd says the website is “pro-competitive”.
“Because petrol is sold on price, people use our service to get underneath the opposition’s price,” he says.
Cadd says he is in a no-win situation.
“The offer was close your company down or take it to court,” he says.
“The average legal proceedings for a case like this will cost $1 million to run. I don’t know where I am going to find the money.”
The service stations named in the case reject the ACCC’s claims.
Caltex said it “strongly rejects” the allegations and will defend the proceeding.
“We believe the continuation of cost-efficient data collection such as OPW is in the best interests of motorists,” a spokesperson for the retailer said in a statement.
Tristan Price, spokesperson for 7-Eleven, said the claims are unfounded and that it will “strenuously defend” the proceedings.
“7-Eleven is family-owned, proudly independent, and provides a viable competitive force in the markets where it operates,” he said.
Coles also plans to “vigorously defend” the case.
This matter is listed for a directions hearing in Melbourne on 26 September 2014.
SmartCompany also contacted BP for comment but did not receive a response prior to publication.
Cara Waters is the editor of SmartCompany. Cara was previously a senior reporter at the Financial Times website FT Adviser in London and has also worked for The Sunday Times.
