ACCC and Flight Centre set for High Court showdown

The High Court will resolve the long-running stoush between the ACCC and Flight Centre over alleged price-fixing.

ACCC chairman Rod Sims (Picture: AAP Image/Dean Lewins)

The competition watchdog’s tussle with Flight Centre over alleged price fixing is set to continue after the High Court agreed to consider another appeal.

Flight Centre in 2015 successfully appealed a 2013 Federal Court decision that it had breached the Trade Practices Act by allegedly insisting airlines could not offer prices direct to customers that were lower than those available to the travel retailer.

The High Court has now granted the Australian Competition and Consumer Commission leave to appeal that decision, which secured Flight Centre a refund of an $11 million fine.

“This case raises important issues for the application of competition laws in Australia in the future, as online offers are increasingly being made directly to consumers by both agents and their principals,” ACCC chairman Rod Sims said.

The 2015 Federal Court decision in Flight Centre’s favour included a finding that distribution and booking services for consumers were not in competition with direct sales by airlines.

Flight Centre managing director Graham Turner said the retailer would continue to vigorously defend its position.

“We are disappointed that the ACCC chose to continue this long running test case, following the clear and unanimous judgement in Flight Centre’s favour in July last year,” he said.

“Given that it is now some six years after the ACCC first requested information from us, we look forward to this matter finally being resolved in the High Court.”

In March 2012, the ACCC instituted proceedings against Flight Centre, alleging that on six occasions between 2005 and 2009, the company attempted to enter into arrangements with Singapore Airlines, Malaysian Airlines and Emirates, in relation to international airfares offered by the airlines on their websites.

Initially, Justice Logan found that Flight Centre had contravened the Trade Practices Act (now called the Competition and Consumer Act) and ordered that Flight Centre pay penalties totalling $11m.

Flight Centre appealed to the Full Court of the Federal Court from Justice Logan’s liability and penalty decisions, and the ACCC lodged a cross-appeal in relation to the penalties imposed.

“Justice Logan had found that Flight Centre and the airlines competed in the market for booking and distribution services for the retail or distribution margin on the sale of airfares, and that Flight Centre had attempted to induce anti-competitive arrangements or understandings with the airlines to prevent them from offering online fares for international airfares on their websites which undercut the fares for those flights which were being offered by Flight Centre,” the ACCC recalled today.

“In overturning Justice Logan’s decision, the Full Court found that there was no separate market for distribution and booking services to consumers and, as a consequence, Flight Centre and the airlines did not compete with each other in such a market.”

In July 2015, the Full Court allowed Flight Centre’s appeal and dismissed the ACCC’s cross-appeal in July 2015.

-- AAP with staff reporter