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NMa Fines Texaco and Three Texaco Filling Stations for Obstructing Tango in the Nijmegen Region

The Netherlands Competition Authority (NMa) has fined Texaco and three Texaco filling stations for a coordinated discount campaign in the Nijmegen region. The NMa has imposed a fine of EUR 1 million on Texaco Nederland B.V. and fines of between EUR 25,000 and EUR 48,500 on each of the Texaco filling stations. Texaco took the initiative in the campaign which involved sharp reductions in the price of petrol, LPG en diesel by the operators of four Texaco filling stations. The reason for this campaign was the arrival of a Tango filling station in the immediate neighbourhood. The cost of the price reduction was borne by Texaco Nederland B.V., initially in full and later partially.

NMa has established that in the period from 15 April 2000 until 17 July 2000 the four Texaco filling stations applied the same discounts. During the first week, Texaco filling stations offered a discount of NLG 0.30 on the recommended price for petrol and diesel and consequently charged up to NLG 0.15 less than the price charged by Tango. Prior to this campaign, coordinated consultation took place between the filling station owners involved. In mid-April this discount campaign was announced through a joint advertisement in the regional daily newspaper, De Gelderlander. In the period after this, lower price discounts were offered jointly.

Agreements with regard to discounts are equated with price agreements and are prohibited in accordance with the Competition Act. As a result of these price agreements, Tango suffered unfair competition, due to which the entry of Tango might have been of short duration. This would have eliminated the price competition which arose as a result of Tango's entry into the market.

In addition to the investigation into the Tango case, NMa is carrying out an investigation into the petrol market as a whole. In December 2001, NMa established that the present system of agreements between oil companies and filling station operators removes the incentive to compete. Since, in the opinion of NMa, the cumulative effect of these agreements has a strong restraining effect on competition on the Dutch market, NMa has announced that it will declare the European block exemption for vertical agreements to be inoperative in this case. This decision is being prepared at present. NMa is expected to take a final decision at the end of this year or at the beginning of next year.