ACCC WINS APPEAL IN FLIGHT CENTRE PRICE FIXING CASE

Written on the 14 December 2016

ACCC WINS APPEAL IN FLIGHT CENTRE PRICE FIXING CASE
THE Australian Competition and Consumer Commission has today won a High Court appeal in relation to Flight Centre's attempt to induce three international airlines to enter into price-fixing arrangements between 2005 and 2009 in relation to air fares offered online by the airlines that were cheaper than those offered by Flight Centre.

The High Court has found the relevant market is for the sale of international airline tickets, and importantly also found that Flight Centre and the airlines competed in that market. This was found to be the case notwithstanding that Flight Centre was an agent for each of the airlines.

"The ACCC welcomes the High Court's decision today," ACCC Chairman Rod Sims said.

"The ACCC pursued this matter because we were concerned that Flight Centre's conduct in this case affected the competitive process. At the core of the matter is the question of whether Flight Centre and the airlines are legally considered competitors. The ACCC has always maintained that they are in competition with one another to sell flights to consumers."

"This decision will provide important guidance for the future application of competition laws in Australia to other situations where competing offers are made directly to consumers by both agents and their principals. It is likely to be particularly relevant when businesses make online sales in competition with their agents."

The decision today follows a decision made by the Federal Court in favour of the ACCC in December 2013, which Flight Centre successfully appealed in the Full Court of the Federal Court in July 2015. The ACCC then appealed to the High Court.

The matter will now return to the Full Federal Court for the determination of the penalty appeal and cross-appeal brought by the parties.
 

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