Australia: Flight Centre wins price fixing of international flights battle against ACCC

Flight Centre has won an appeal overturning $11 million in penalties imposed against the company for anti-competitive practices.

The travel agency was ordered to pay the fine in March 2014 after the Federal Court found its attempts to stop three international airlines undercutting its fare offerings was anti-competitive.

But that decision was thrown out in Brisbane on Friday morning as the full bench of the Federal Court upheld an appeal from Flight Centre in relation to a six-year legal battle with the consumer watchdog.

The Australian Competition and Consumer Commission was ordered to pay costs with the travel agent to have its fine repaid, plus interest.

The case stemmed from alleged attempts by Flight Centre to control the airfares of three international carriers, Singapore Airlines, Malaysia Airlines and Emirates, between 2005 and 2009.

As the airlines increasingly offered cheaper prices on their websites than they offered to the travel agent to on-sell to its customers it put pressure on the retailer’s “price beat guarantee”.

The primary judge in the initial trial accepted the ACCC’s allegations these moves were designed not only to give the travel agent access to the cheaper prices but to stop the airlines offering fares cheaper than Flight Centre could sell and maintain a commission. The judge found this was anti-competitive because Flight Centre and the airlines were competitors in the distributions and booking market.

But on Friday judges Allsop, Davies and Wigney rejected those findings.

They found Flight Centre was actually operating as an agent for the airlines rather than a competitor against them in selling fares.

Full content: Financial Review

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