FLIGHT CENTRE SAGA DRAGS ON AS ACCC PLEADS WITH HIGH COURT

Written on the 28 August 2015 by Nick Nichols

FLIGHT CENTRE SAGA DRAGS ON AS ACCC PLEADS WITH HIGH COURT

FLIGHT Centre Travel Group's (ASX:FLT) six-year battle with the consumer watchdog could drag out even longer with a bid to challenge the company's recent historic win in the High Court.

The Australian Competition and Consumer Commission is seeking special leave of the High Court to appeal the decision handed down by the Full Court of the Federal Court of Australia on July 31.

The decision was a slap in the face for the regulator which had alleged Flight Centre tried to induce three international airlines to enter into price-fixing arrangements.

The court rejected the ACCC's cross-appeal and overturned the judgement handed down against Flight Centre in December 2013 in relation to breaches of the Trade Practices Act 1974.

In the initial case, which was heard in the Federal Court in 2012, the ACCC alleged that Flight Centre had engaged in conduct that amounted to attempts to control prices on six occasions between 2005 and 2009.

On 31 July 2015, the Full Court allowed an appeal by Flight Centre against the judgment of the trial judge, Justice Logan. 

In his findings for Flight Centre last month, Justice Logan said there was no separate market for distribution and booking services to consumers and that Flight Centre and the airlines did not compete with each other in such a market.

It found that the supply of booking and distribution services was an ancillary part of the supply of international air travel in which Flight Centre acted as agent for, and not in competition with, the airlines.

"The ACCC had brought these proceedings because it was concerned that, if successful, Flight Centre's actions were likely to have meant that consumers would not have seen the benefit of competition through lower ticket prices offered online by the airlines concerned," says ACCC chairman Rod Sims.

"This case also 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."

A clearly frustrated Flight Centre says it plans to continue the fight despite pointing out the unanimous judgement by the Full Court last month.

"We are disappointed that the ACCC has chosen to continue this action and are surprised that the ACCC has not accepted the clear and unanimous judgement of the Full Court that included the highly respected Chief Justice of the federal Court," says Flight Centre managing director Graham Turner.

"We will, of course, oppose the action and continue to vigorously defend our position.

"For more than 30 years Flight Centre has sought to deliver cheaper airfares to the travelling public.

"We are not in the business of attempting to make airfares more expensive and we will continue to seek access to all fares to ensure the millions of customers that we serve are not forced to pay more for their flights."

 


Author: Nick Nichols

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