Special Business Regulations 18400-22949.92.2Unfair Practices

Section § 21200

Explanation

This law makes it illegal for companies selling motor vehicle fuels or oils in California to charge different prices to different customers if doing so harms competition. If a company is accused of this, they must prove that there was a legitimate reason for the price difference, like matching competitors' prices. However, they can't have contracts based on these lower prices last more than a year. Price differences are allowed if they're due to actual cost differences or changes in market conditions. Also, sellers can freely choose their customers, and state or local agency purchases aren't affected by this law.

It is unlawful for any refiner, distributor, manufacturer, or transporter of motor vehicle fuels or oils engaged in business in this state, either directly or indirectly, to discriminate in price between different purchasers of motor vehicle fuels or oils of like grade and quality, where the effect of such discrimination is to lessen competition, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them.
Upon proof being made, at any hearing on a complaint under this section, that there has been such discrimination in price, the burden of rebutting the prima facie case thus made by showing justification shall be upon the person charged with a violation of this section. Nothing herein contained shall prevent a seller rebutting the prima facie case thus made by showing that his lower price to any purchaser or purchasers was made in good faith to meet an equally low price of a competitor and was also offered to any other of his purchasers in competition with the purchaser or purchasers receiving such lower price. If such lower price should be incorporated into a term contract, no such contract shall as to such discriminatory price be valid for more than one year.
Nothing in this section shall prevent differentials which make only due allowance for differences in the cost of manufacture, marketing, transportation, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered.
Nothing in this section shall prevent persons engaged in selling motor vehicle fuels or oils in this state from selecting their own customers in bona fide transactions and not in restraint of trade.
Nothing in this section shall prevent price changes from time to time where in response to changing conditions affecting the market for, or the marketability of, the products concerned, such as, but not limited to, actual or imminent deterioration of products, distress sales under court process, or sales in good faith in discontinuance of business in the products concerned.
Nothing in this section shall apply to the purchase of motor vehicle fuels or oils for their own use by state and local agencies or public utilities.
motor vehicle fuels pricing price discrimination competition impact

Section § 21201

Explanation
This law applies to businesses in California that refine, distribute, manufacture, or transport petroleum products and have production, refining capacity, or wholesale sales of at least 50,000 barrels a day.
The provisions of this chapter shall only apply to refiners, distributors, manufacturers, or transporters of petroleum products engaged in business in this state whose total production, gasoline refining capacity or sales volume at the wholesale level is 50,000 barrels a day or more.
petroleum products refiners distributors

Section § 21202

Explanation

This law states that if someone is harmed because another person broke the rules of this chapter, the injured person can sue for damages. If they win, they can receive three times the amount of the actual damages plus reasonable attorney's fees.

Any person injured by any violation of the provisions of this chapter may bring an action for the recovery of damages. Judgment may be entered for three times the amount at which the actual damages are assessed plus reasonable attorney’s fees.
damages recovery treble damages violation of provisions

Section § 21203

Explanation

This law highlights the importance of fair competition in the distribution and sale of motor vehicle fuels and oils in California. It emphasizes that competition is crucial for the state's economy and public welfare. If a contract sets prices that don't comply with this law, those pricing terms will be void unless they need to be extended due to federal price control laws.

The Legislature finds and declares that distribution and sales of motor vehicle fuels and oils in the State of California affect the general economy of the state, the public interest and the public welfare. Competition and freedom from unreasonable discriminatory practices are essential to the fair and efficient functioning of a free market economy. Competitive conditions are rapidly changing with resulting market dislocation. Therefore, it is further provided that any existing contracts, arrangements, or agreements with provision for prices not in compliance with this chapter shall be void on and after the effective date of this chapter as to such provisions, except for any as may be required to be extended beyond said date to comply with any applicable federal price control laws, regulations or orders.
motor vehicle fuels oil sales fuel distribution