ACCC v Leahy Petroleum Pty Ltd: petrol price fixing action fails

In Australian Competition & Consumer
Commission v Leahy Petroleum Pty Ltd
[2007] FCA 794, the Federal Court dismissed ACCC’s application against 18 respondents for civil penalties  relating to its allegations of the fixing of retail prices
of petrol in the Geelong retail petrol market.

The ACCC relied on circumstantial evidence,
principally a document compiled from data available to the ACCC of records of
telephone communications between participants in the Geelong retail petrol
market, and records of changes to the retail price of ULP by various
participants in that market. Some admissions were made by some respondents who also consented to orders.

The action failed as the Judge found there was insufficient evidence:

"948 Thus, all of the witnesses called to give evidence for the ACCC who acted on
behalf of parties to the alleged arrangements or understandings confirmed to a
greater or lesser degree the absence of any commitment, moral obligation, or
obligation binding in honour on the part of any party to any of those
arrangements or understandings.  The evidence on the issue is all one way.  It
is not possible to dismiss it, as counsel for the ACCC attempted to do in
submissions, as indicative of freedom to withdraw from, or to act inconsistently
with, an arrangement or understanding on a particular occasion.  The plain fact
is that there was nothing by way of constraint to raise prices, felt or
otherwise, from which any party had to withdraw, or with which it was necessary
to act inconsistently, if prices were not increased on a particular occasion.
The express evidence is overwhelmingly to the effect that an essential element
of an arrangement or understanding, whether in the abstract or as pleaded, in
the form of a commitment or obligation to increase prices, did not exist…As I have
said, an arrangement or understanding in which each party is free to do as it
wishes is a creature unknown to s 45(2) of the Trade Practices Act.  "

Judge Gray decided that none of the arrangements or understandings alleged by the
ACCC existed and dismissed the proceeding against the respondents who
defended it.  He also refused to rely on the admissions made by the respondents who
consented to the case being decided against them, and coupled with the finding that
the alleged arrangements or understandings did not exist, came to the
conclusion that he should not give effect to the consents.

The ACCC has expressed disappointment at the decision.

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