The Australian Competition and Consumer Commission has issued a draft notice* opposing Woolworths' and Australian Independent Retailers' proposal to restrict payment options at their new pay at pump facility.
Australian Independent Retailers Pty Ltd is a subsidiary of Woolworths Limited.
Woolworths and AIR propose to introduce a pay at pump facility at certain Caltex Woolworths and Caltex Safeway fuel outlets. However, consumers will only be able to use the facility with a Woolworths Everyday Money Credit Card (the EM Credit Card). This is a contactless credit card issued by HSBC. Pay at pump facilities already exist at a number of other petrol stations and consumers have a range of payment options at these facilities.
A contactless card is embedded with a radio chip which allows the holder to pass their card in front of a contactless payment reader to complete a transaction, without swiping or dipping the card through or into a machine.
"The proposal reduces consumer choice to one payment option (the EM Credit Card) at Woolworths' pay at pump facilities," ACCC Chairman, Mr Graeme Samuel, said.
"The ACCC considers that the potential benefits to consumers of the facility are significantly limited by restricting it to holders of the EM Credit Card."
Mr Samuel said the ACCC is concerned that the arrangement will distort the competitive process between card issuers, which would typically compete on features such as interest rates, fees and reward programs.
A number of interested parties noted that the arrangement is inconsistent with the card schemes' 'honour all issuers' principle. In the ACCC's view, this means the arrangement reduces the utility of payment products to both issuers and consumers.
Woolworths and interested parties now have time to lodge submissions in response to the draft notice, before the ACCC decides whether to issue final notices revoking the notifications.
More information regarding the notifications and copies of the draft notices will be available from the ACCC's website, www.accc.gov.au (follow the Public Registers and Authorisations and Notifications Registers links) or by emailing the Adjudication Branch at adjudication@accc.gov.au.
*Businesses can obtain protection in relation to conduct that might be at risk of breaching the exclusive dealing provisions of the Trade Practices Act 1974 by lodging a notification with the ACCC. Once lodged, protection for the notified conduct commences automatically, or in the case of third line forcing, after 14 days. The ACCC may revoke a third line forcing notification if it is satisfied that the likely benefit to the public from the conduct will not outweigh the likely detriment from the conduct. Prior to issuing a notice to revoke a notification, the ACCC must issue a draft notice setting out its reasons for proposing to revoke the notification.
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