FLIGHT CENTRE AND ACCC BATTLE GOES TO HIGH COURT

Written on the 11 March 2016

FLIGHT CENTRE AND ACCC BATTLE GOES TO HIGH COURT

THE consumer watchdog lives to fight another day in its six-year saga with Flight Centre Travel Group (ASX:FLT) after winning the right to challenge a landmark verdict.

The High Court of Australia has granted the Australian Competition and Consumer Commission (ACCC) special leave to appeal the decision handed down by the Full Court of the Federal Court last year.

The initial case, which was heard in the Federal Court in 2012, the ACCC alleged that the Brisbane-based travel retailer had engaged in price fixing with Singapore Airlines, Malaysian Airlines and Emirates on six occasions between 2005 and 2009.

Flight Centre's 'Price Beat Guarantee' allegedly breached the Competition and Consumer Act 2010, with consumers not receiving the benefit of competing lower ticket prices offered by the airlines.

Flight Centre was found to have contravened the Act and ordered to pay penalties totalling $11 million. Following an appeal, the decision was overturned last July with the penalty refunded to Flight Centre.

Full Court found that there was no separate market for distribution and booking services to consumers, instead the offering was an ancillary part of Flight Centre's business - not competition for the airlines.

Flight Centre managing director Graham Turner says the company will continue to fight to access all fares and ensure consumers aren't forced to pay more for their flights.

"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, and we will once again vigorously defend our position," Turner says.

"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."

He says the primary judge in the initial case 'erred in various areas' including that the company and airlines competed in the same market.

The most recent decision in Flight Centre's favour was unanimous.

ACCC chairman Rod Sims says the group is pleased that the matter will be considered by the High Court.

"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," Sims says.

The case will go to a full hearing of the High Court later this year.

 


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