product to any level of its own or affiliated company at a

price to recover the cost of performing each marketing

function involved.

The compromise language was perfected to adjust S.2798, the companion bill to H.R. 6722 last year, to the NOJC concept of posted wholesale transfer price. SSDA met every compromise request, accepted the compromise offer, and with approval of NOJC leaders paid its counselors to perfect the language which was submitted to the Senate Committee for consideration in

the last session. NOJC ultimately rejected the compromise attempt
its leadership originated. The Senate Committee inserted the NOJC pro-

posal and voted 16 to 1 for the revised bill. We have, since
the end of the 96th Congress, made several attempts to return
to the conference table with NOJC leadership to work out
mutually agreeable concepts that may be suggested to this Congress
for dealing with the marketing practices that are destroying
competition and dealer-operated service stations. It appears
hopeless, and I, therefore, suggest to this Committee that

this Congress should proceed with its best judgment and enact
the necessary legislation to correct conditions in the retailing
of gasoline.

Appendix B

STATEMENT OF POSITION

SERVICE STATION DEALERS OF AMERICA

BY JACK W. HOUSTON, CHAIRMAN, GOVERNMENT AFFAIRS COMMITTEE

ON THE FINAL REPORT OF

THE STATE OF COMPETITION IN GASOLINE MARKETING

AS REQUIRED BY TITLE III OF THE PETROLEUM MARKETING PRACTICES ACT, PUBLISHED JANUARY, 1981

BY THE U.S. DEPARTMENT OF ENERGY, OFFICE OF COMPETITION

Dealer-operated full service motor fuel service stations are a desirable form of competition. 1/ "The market mechanism, tempered by anti-trust statutes and other economic legislation, has been the cornerstone of growth and development throughout most of the U.S. economy." _2/

"There is a need for federal legislation to insure that a retail sector at least as strong as today's is in existance after the coming evolution in the structure of the market has taken place". 3/

1/ FTC, Docket 89-34, October 31, 1980, Exxon Corporation, ET AL, Complaints Counsel's First Statement of Issues ... page 367

2/ DOE Title III, Final Report, Chapter VIII, Recommendations, Summary, page 236

3/ Report 95-731, page 25, 95th Congress, Second Session, Report On The Petroleum Marketing Practices Act of 1978

1

"

...

...

Though the authors of the Title III Report concluded that competition is an inherently unfair process", the definition of competition offered by Senator Hollis as Congress enacted the FTC Act best described unfair competition when he said: competition is unfair when it resorts to methods which shut-out competitors who by reason by their efficiency, might otherwise be able to continue in business and prosper". 4/ Had the authors of the Title III Report applied this definition to

the data examined, suppliers, both refiners and jobbers, would have been found to have been engaging in subsidizing and unfair marketing practices.

The authors said that even if they had found refiners had used a predatory campaign: "... the Department believes that banning all refiners from company-store operations is not the appropriate response, especially given the existing anti-trust laws." This is a biased opinion, notwithstanding that the anti-trust laws do not provide relief. However, even if relief is provided in existing anti-trust laws, the relief would not be reachable for small business or even by the federal government if FTC acting in the interest of small business sought to bring refiners and jobbers into the courts. The time required for prosecution would extend far beyond the period that competition and dealers will exist in gasoline marketing.

4/ FTC, Docket 89-34, October 31, 1980,

page 384