Flight Centre and ANZ: double blow for ACCC in court

The ACCC has been dealt a double blow after the Federal Court ruled against it in two long-running test cases.

The Australian Competition and Consumer Commission has been dealt a double blow after the Federal Court ruled against the competition regulator in two long-running test cases dealing with pricing between agents and companies.

The Full Court yesterday overturned the Flight Centre judgment that followed charges it had breached the Trade Practices Act by pressing airlines not to undercut it on pricing ­between 2005 and 2009.

The ACCC claimed attempts by Flight Centre to get Malaysian, Singapore and Emirates airlines to support Flight Centre agents’ prices were a breach of the competition laws. The court found there was no separate market for booking and distribution services to consumers, and therefore Flight Centre and the airlines did not compete with each other. Instead, it found the supply of booking and distribution services was a part of the supply of international passenger air travel, with Flight Centre acting as an agent for the airlines.

“The agreements proposed in Flight Centre’s emails to the airlines did not occur in a market in which Flight Centre and the airlines both supplied services in competition with each other. It occurred in the market for the supply of international passenger air travel services,” Justices James Allsop, Jennifer Davies and Michael Wigney found.

“To the extent that the conduct involved the fixing of prices, it was not caught by the deeming provision in s 45A because it did not occur in a market in which Flight Centre and the airlines competed in respect of the ­supply of services.”

In another decision from the court, the ACCC lost a claim against ANZ for alleged price-fixing with mortgage brokers. The ACCC alleged in 2004 ANZ had required Mortgage Refunds Pty Ltd to limit the refund it could provide its customers when arranging ANZ home loans. In court action dating back to 2007, it was alleged ANZ wanted the broker to limit any refund to ANZ customers to $600 if it was to continue to be accredited by ANZ.

The ACCC had lost the case against ANZ, and the Full Court dismissed its appeal, finding the refund deal was not part of competition between the bank and the broker, but part of the principal-agent relationship. The ACCC may appeal.