[Congressional Record Volume 149, Number 34 (Tuesday, March 4, 2003)]
[Senate]
[Page S3049]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      STANDING UP FOR THE CONSUMER

  Mr. WYDEN. Mr. President, gasoline prices are soaring through the 
stratosphere, and the Federal Trade Commission, which is supposed to be 
standing up for the consumer, ought to stop playing footsie with the 
oil companies and take steps to protect the American people. I have 
been trying to get the Federal Trade Commission to do its job now for 
several years. In fact, I have supplied them with detailed reports 
outlining anticompetitive practices in the oil industry in hopes that I 
could get their attention. Unfortunately, they are still sitting on the 
sidelines.
  This morning I will outline what some of those anticompetitive 
practices are that the oil companies are now using to victimize the 
American consumer.
  The oil companies are redlining. What they have sought to do is keep 
independent wholesalers known as ``jobbers'' from competing in markets 
by refusing to let independent dealers buy better priced gasoline from 
the local jobbers. This is a technique to wall off whole communities 
from competition. Redlining is going on today.
  The oil companies are also zone pricing. They charge different prices 
for the same gas at their own branded stores in adjacent neighborhoods, 
pricing it as high as the market will bear. They have also charged 
independent dealers higher wholesale prices than they charge the 
company stores. The end result, the independents cannot compete.
  So what we have in communities across the country is two stations 
that are located next to each other, and because of a Supreme Court 
decision, oil companies are required to treat those companies similarly 
situated in the same way. But what the oil companies do very cleverly 
is divide that community into different zones. Then they can stick it 
to one of the stations. That station goes out of business. There is a 
local monopoly and the consumer gets hosed once again.
  A third area I have outlined for the Federal Trade Commission is that 
the oil companies keep the market to themselves. In the past, they have 
kept down refineries that could have increased supply and introduced 
new competition. We have given this information to the Federal Trade 
Commission and, again, they sit on their hands.
  Finally, of particular importance to west coast consumers, where up 
and down the west coast of the United States prices have soared, people 
are paying $2 a gallon and close to it in many communities. What we 
have seen in the past is the oil companies have exported gasoline to 
Asia at a discount and then more than made up for it by sticking 
consumers with higher prices in the tight west coast market.
  The oil companies today would say they are no longer doing this, but 
the fact of the matter is that oil company representatives told my 
Oregon colleague, Senator Smith, who has worked with me so 
cooperatively on many of these issues, in an open hearing in the 
Commerce Committee that they would export to Asia once again whenever 
it was in their commercial interest. So hypothetically, if they were 
allowed to drill for oil in the national wildlife refuge in Alaska, 
apart from the environmental considerations, based on the testimony in 
the Senate Commerce Committee, the oil companies would be taking that 
oil from the wildlife refuge, selling it to Asia at a discount and 
sticking it to people in Oregon, Washington, and California.
  It seems to me the Federal Trade Commission ought to be taking steps 
to stand up for the consumer. If they do not think they have the 
authority to stand up for the consumer at this point, they ought to 
come to the Senate and tell us what authority they actually need in 
order to protect the consumer and the gas-buying public. The 
unfortunate response from the Federal Trade Commission has been to 
simply sit this issue out.
  For example, on July 17, 2002, in a hearing before the Senate 
Commerce Committee, I outlined once again for the Federal Trade 
Commission these anticompetitive practices. I went through with them 
the impact of redlining, of zone pricing, of the pressure that has been 
put on independent gasoline stations. I asked them to furnish for the 
record any set of concrete steps they have actually taken to protect 
the consumer.
  We cannot find anything. We cannot find any specific action the 
Federal Trade Commission took, either before July 17, 2002, when I 
asked them that question, or since then. I am very troubled because I 
think the problems we are seeing today, and they are long-term 
problems, cry out for someone in the Federal Government to stand up for 
the consumer. It is the job of the Federal Trade Commission to deal 
with anticompetitive practices. These are long-term, anticompetitive 
practices that are siphoning the competition out of the gasoline 
markets in the United States.
  I hope the Federal Trade Commission will either do its job under 
existing law--I think they have the authority to deal with these 
anticompetitive practices--or if they do not believe they do have the 
authority they need to protect the consumer, they should come to the 
Senate and outline what powers they need in order to stand up for the 
American people.
  Essentially, both of the reports that I did and have submitted to the 
Federal Trade Commission found the very same thing. They found that the 
oil companies were engaging in anticompetitive practices. I hope now, 
given the enormous impact these huge gasoline price spikes are having 
on consumers, the ramifications for business--we had scores of 
businesses and business associations contact us in the past--that we 
can get the Federal Trade Commission off the side lines. They have a 
job to do. They are not doing it with respect to protecting the 
American people from anticompetitive practices in the gasoline 
businesses.
  I intend to keep coming to the floor and the Senate Commerce 
Committee until the Federal Trade Commission is prepared to do its job.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Enzi). The Senator from Michigan.




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