Travel agency Flight Centre could face a multi-million dollar penalty after the Australian Competition and Consumer Commission won a legal appeal against the company accused of attempting to fix the price of international airfares.
The ACCC first hauled Flight Centre to the Federal Court in 2012 claiming the chain had tried to enter into arrangements with Singapore Airlines, Malaysian Airlines, and Emirates so that it could ultimately offer cheaper international airfares.
More BusinessDay Videos
- Video duration
- 00:36
ACCC wins case against Flight Centre
ACCC wins case against Flight Centre
Competition watchdog ACCC has won a high court battle with Flight Centre over international airfare pricing.
Up Next
'Davos' of women comes to Sydney
- Video duration
- 01:02
- Video duration
- 01:02
'Davos' of women comes to Sydney
'Davos' of women comes to Sydney
Sydney has won a global bid to host the 'Davos of women' after it was backed by leading business and political leaders. Video provided.
Up Next
ASX winners and losers - a snapshot
- Video duration
- 00:43
- Video duration
- 00:43
ASX winners and losers - a snapshot
ASX winners and losers - a snapshot
The stand out listings traded on the ASX captured at key moments through the day, as indicated by the time stamp in the video.
Up Next
China's 'One Belt, One Road' propaganda
- Video duration
- 01:12
- Video duration
- 01:12
China's 'One Belt, One Road' propaganda
China's 'One Belt, One Road' propaganda
Children from different nations team up for a song and dance promoting China's transcontinental trade and infrastructure initiative.
Up Next
Netmarble's trading debut
- Video duration
- 03:05
- Video duration
- 03:05
Netmarble's trading debut
Netmarble's trading debut
Netmarble Games will raise as much as $US2.3 billion after pricing its IPO at the top of its targeted range, amassing funds to get into new markets and titles.
Up Next
Qantas discovers that loyalty pays off
- Video duration
- 02:59
- Video duration
- 02:59
Qantas discovers that loyalty pays off
Qantas discovers that loyalty pays off
Qantas' frequent-flyer business, earmarked for sale at least twice, has delivered consistent growth since the airline's historic loss in 2012.
Up Next
So what's better than the bank tax?
- Video duration
- 02:26
- Video duration
- 02:26
So what's better than the bank tax?
So what's better than the bank tax?
Before branding it outrageous, tell us what immediate revenue raising would be better, fairer and possible? Michael Pascoe comments.
Up Next
Snap misses forecasts for new users and sales
- Video duration
- 05:00
- Video duration
- 05:00
Snap misses forecasts for new users and ...
Snap misses forecasts for new users and sales
Snap Inc.'s Snapchat app added fewer users than projected in the first quarter, a sign that the young company may have trouble expanding its audience as Facebook Inc. copies its most popular features.
ACCC wins case against Flight Centre
Competition watchdog ACCC has won a high court battle with Flight Centre over international airfare pricing.
The ACCC won the case, but Flight Centre successfully appealed in the Full Court of the Federal Court in 2015. The ACCC then appealed to the High Court and won the case in a verdict delivered on Wednesday
It was alleged that Flight Centre attempted to enter into arrangements with the three airlines in relation to its "Price Beat Guarantee", which compelled it to beat its competitors' cheaper fares by $1 and offer its customers a $20 voucher.
"At the core of the matter is the question of whether Flight Centre and the airlines are legally considered competitors," said ACCC chairman Rod Sims.
"The ACCC has always maintained that they are in competition with one another to sell flights to consumers."
Flight Centre was originally ordered to pay penalties totalling $11 million. It now faces the prospect of paying the amount.
In handing down that penalty in 2013, Justice John Logan said Flight Centre and the airlines competed in the market for booking and distribution services for the retail or distribution margin on the sale of air fares.
He said that Flight Centre had attempted to induce anti-competitive arrangements or understandings with the airlines to prevent them from offering international airfares on their websites which undercut the travel agency's fares for those flights.
But the Full Court allowed Flight Centre's appeal and dismissed the ACCC's cross-appeal. The High Court ultimately decided in the ACCC's favour.
The majority of judges rejected the ACCC's primary case but accepted its secondary case. For this reason the Court decided that each party should bear its own costs in the High Court and for the Full Federal Court appeal to date.
Mr Sims welcomed the High Court's decision.
"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," he said.
"It is likely to be particularly relevant when businesses make online sales in competition with their agents."
The matter will return to the Full Federal Court for the determination of the penalty appeal and cross-appeal.