The Australian Competition and Consumer Commission has decided not to oppose an exclusive arrangement between Woolworths and HSBC.
Under the arrangement, the Woolworths Everyday Money Credit Card issued by HSBC, will be the only payment option at Woolworths' new contactless pay at pump facility (epump) for a limited period of time.
Businesses may 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.
"In response to ACCC concerns, Woolworths has explicitly limited the operation of the exclusive arrangement until 15 August 2010," ACCC Chairman, Mr Graeme Samuel, said today.
"The ACCC expects that consumers holding other contactless cards will be able to use epump after that date, if not sooner.
"The ACCC has also obtained a public commitment from Woolworths that it will negotiate in good faith with other contactless card issuers to enable their cards to be used at epump. Any agreement reached should be substantially consistent with the HSBC terms."
Woolworths has taken these steps after the ACCC issued a draft notice on 29 January 2009 opposing the exclusive arrangement.
"The ACCC considers that the exclusive arrangement underpins the introduction of a new and innovative payment technology which benefits users through its speed, convenience and efficiency," Mr Samuel said.
"The ACCC considers that these benefits outweigh any effects on competition and consumer choice during the limited exclusivity period.
"The ACCC will be concerned if the exclusivity period extends beyond 15 August 2010 or if there are no other payment options at that time or soon after the exclusivity period ends. Accordingly, the ACCC will be closely monitoring Woolworths' progress in making other payment options available at epump."
The ACCC can review this decision at any time.
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 to the public 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.
More information regarding the notification is available from the ACCC's public register under exclusive dealing notifications register.
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