LANDMARK VERDICT FOR FLIGHT CENTRE
Written on the 31 July 2015 by Brisbane Business News
FLIGHT Centre (ASX: FLT) has swooped the ACCC in a long running competition law test case, with the consumer watchdog also being ordered to pay for both the initial case and subsequent appeal.
The Full Court of the Federal Court of Australia rejected the ACCC's cross-appeal and overturned the judgement handed down against FLT 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 FLT had engaged in conduct that amounted to attempts to control prices on six occasions between 2005 and 2009.
FLT managing director Graham Turner says the company is hoping the verdict 'brings this six-year saga to an end'.
He says the consumer will always be at the heart of FLT's business.
"As we said when the ACCC initiated this test case, for more than 30 years Flight Centre has sought to deliver cheaper airfares to the travelling public," says Turner.
"The company is not in the business of attempting to make airfares more expensive.
"As an agent that provides considerable advice and help to the travelling public and extensive marketing for airlines, FLT asks for appropriate commissions from suppliers and also reasonable access to all deals that they release to the market.
"This is a logical and natural business request for an agent to make to ensure the customers it serves on behalf of airlines are not disadvantaged.
"Given that travel agents book up to 80% of international flights in Australia, it benefits consumers because it means special offers are not solely available from supplier websites."
FLT says it will continue to consider this morning's ruling and, if appropriate, will provide additional updates in due course.
The previously imposed financial penalties of $11 million will be repaid to FLT, plus interest, ad included in its financial results for 2015/16.
ACCC chairman Rod Sims says the commission 'will carefully consider the judgment'.
"The ACCC took this action because of its concern that Flight Centre's conduct could harm competition and ultimately affect the prices available to consumers," says Sims.
"If it had been successful in its conduct, 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
"Pursuing anti-competitive agreements and practices to protect consumers remains one of the ACCC's enduring enforcement priorities."
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