MOBIL Oil Australia will avoid being a party to Federal Court action pursued by the Australian Competition and Consumer Commission (ACCC) after giving them an undertaking in August.

The ACCC alleges that Informed Sources Australia – the operators of the Motormouth.com.au website – allowed petroleum retailers to communicate with each other about their prices via an information sharing arrangement.

Subscribers to the service provided Informed Sources with pricing data at frequent, regular intervals, receiving in return collated data from the other subscribers, and various reports containing pricing information across particular regions.

The ACCC alleges that these arrangements had the effect or likely effect of substantially lessening competition in markets for the sale of petrol in Melbourne, with ACCC chairman Rod Sims saying the arrangements were likely to decrease competitive rivalry.

“The ACCC alleges that fuel retailers can use, and have used, the Informed Sources service as a near real time communication device in relation to petrol pricing,” he said.

“In particular, it is alleged that retailers can propose a price increase to their competitors and monitor the response to it. If, for example, the response is not sufficient, they can quickly withdraw the proposal and may punish competitors that have not accepted the proposed increased price,” Mr Sims said.

“Given the importance of price competition in petrol retailing, the ACCC is concerned that consumers may be paying more for petrol as a result.”

The ACC has since instituted legal proceedings against Informed Sources Australia and five petrol retailers, alleging that they contravened section 45 of the Competition and Consumer Act 2010 (the Act).

The competition provisions of the Act prohibit contracts, arrangements or understandings that have the purpose, effect or likely effect of substantially lessening competition.

The retailers are BP Australia, Caltex Australia Petroleum, Woolworths, 7-Eleven Stores and Eureka Operations, which trades as Coles Express.

Mobil, a subsidiary of ExxonMobil, was a subscriber to the Informed Sources service until October 2010 when it sold its interest in fuel retailing assets in Australia to 7-Eleven.

The company gave a court enforceable undertaking to the ACCC that it would not subscribe to the Oil Price Watch service or any similar electronic retail petrol price information service operating in Australia for a period of five years.

“Mobil Oil Australia has always sought to act transparently and honestly and continues to support and promote open competition. We have fully cooperated and will continue to cooperate with the ACCC,” the company said in an announcement.

In its announcement, the ACCC said it accepted the undertaking and had not joined it to the Federal Court proceedings, in which it seeks declarations, injunctions, pecuniary penalties and costs.

This matter is listed for a directions hearing in Melbourne on 26 September 2014.