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Flight Centre faces $11 million fine after it loses High Court battle with ACCC

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by December 14, 2016 General

Flight Centre has lost its High Court battle with the Australian Competition and Consumer Commission on its dispute over whether the agency has violated international competition laws on airfares.

Flight Centre had approached the Singapore Airlines, Emirates and Malaysia Airlines with regard to discounts in airfares. The agency tried to persuade airlines to sign contracts in airfares due to concern that they were offering discounts directly to customers at a rate that it can’t afford. It had sent them a series of emails asking them to stop selling discounted tickets to customers directly. The agency even threatened to stop selling tickets to the airlines if they fail to comply.

The Federal Court fined the company $11 million after an initial finding but it got turned down upon the company’s appeal.

It was the Australian competition watchdog that initiated the case. The organisation had alleged that Flight Centre engaged in anti-competitive conduct when it induced the airlines to stop selling low-priced airfares directly to customers. A majority of the High Court judges were of the view that Flight Centre was in direct competition with the aforementioned agencies when the case happened. The case has now returned to the Federal Court to determine the penalty.

The High Court had ordered Flight Centre to pay a fine of $11 million in 2013. However, the amount was later refunded to the company. Justice John Logan had said that Flight Centre was in direct competition with the airlines while handing down the punishment. But Flight Centre had appealed against the case in the Federal Court and had gained a favourable verdict. ACC appealed against it in High Court and turned the tide against Flight Centre. The company said it is reviewing the judgement.

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