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5 - The Role of Platforms for Facilitating Anticompetitive Communication

Retail Gasoline in Australia*

Published online by Cambridge University Press:  06 December 2024

By
David P. Byrne ,
Nicolas de Roos ,
A. Rachel Grinberg  and
Leslie M. Marx
Edited by
Joseph E. Harrington Jr.  and
Maarten Pieter Schinkel
Joseph E. Harrington Jr.
Affiliation:
University of Pennsylvania
Maarten Pieter Schinkel
Affiliation:
Universiteit van Amsterdam
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Summary

  • ◦ This case study describes price signaling through a third-party data subscription service.

  • ◦ Informed Sources provided a data subscription service to companies operating in the retail gasoline market in Australia. Each subscribing company provided its prices at a high-frequency (on the order of every fifteen to thirty minutes) to the Informed Sources online platform and was given access to all subscribers’ prices on that platform.

  • ◦ The Informed Sources platform was supportive of collusion as it facilitated coordinating on high prices – by allowing for low-cost signaling of future prices – and monitoring for compliance with those high prices. The platform allowed for tacit and indirect communication, and collusion could occur without explicit and direct communication.

  • ◦ Using data from a similar platform, FuelCheck, empirical evidence is provided that supports this type of platform having anticompetitive effects by reducing the risks and costs associated with price leadership while achieving a common understanding among firms as to the prices to charge.

  • ◦ For policymakers, the case study underscores competitive concerns associated with price-sharing platforms. In particular, the speed and reliability with which communication was possible through the Informed Sources platform substantially removed the usual deterrents to firms’ using prices for signaling.

Keywords

third-party dataprice signalingmonitoringcollusive price leadershipgasoline
Type
Chapter
Information
Cartels Diagnosed
New Insights on Collusion
 , pp. 131 - 170
Publisher: Cambridge University Press
Print publication year: 2025

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