FTC Staff: No Present Intention to Recommend Challenging Voluntary Fee Program in Connecticut Heating Oil Industry to Fund Consumer Education and Retailer Training

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The Federal Trade Commission's Bureau of Competition staff has issued an advisory opinion letter, in response to a request from the Independent Connecticut Petroleum Association (ICPA), stating that it has no present intention to recommend a challenge to the proposed system, which would collect a voluntary assessment from heating oil retailers and use the money to fund consumer education and retailer training programs.

According to the staff letter, the proposed program is similar to one approved by Congress, which ended when its authorizing legislation expired in 2010. The new Connecticut program would collect a small fee of twelve-hundredths of a cent per gallon from willing retailers to fund activities such as consumer education and technical training for retailers. The voluntary program would end when and if Congress renews the statutory program.

The FTC staff concluded that this new program is unlikely to harm competition, for several reasons. First, the education and training programs are likely to create value to consumers, which likely will outweigh any minimal incremental increase in costs. Second, the voluntary nature of the program will allow retailers to withdraw from the program and compete on the basis of lower prices as they see fit. Finally, any data collected through the program will be aggregated before it is transferred and reported, so that industry members will not learn competitively sensitive information about other firms in the market.

The staff advisory opinion is limited to the competition law analysis requested by the ICPA. The advisory opinion can be found on the FTC's website and as a link to this press release. (The staff contact is Neil Averitt, Bureau of Competition, 202-326-2885.)

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