Flight Centre appeals $11 million fine for price-fixing

Flight Centre has appealed an $11 million dollar fine imposed by the Federal Court last month for anti-competitive behaviour.

Federal Court judge John Logan handed down the multimillion-dollar penalty following court proceedings last year, where it was found the travel agency had entered into price-fixing arrangements with three airlines.

The proceedings were brought forward by the Australian Competition and Consumer Commission, which argued Flight Centre had threatened to stop selling flights for Singapore Airlines, Malaysia Airlines and Emirates in order to offer the lowest fare.

The court found the travel agency had broken the law on five occasions between 2005 and 2006. When imposing the fine, Justice Logan said there was “no doubt” commercial profit was the driver behind Flight Centre’s conduct.

Flight Centre lodged an appeal last week and in a statement to the Australian Securities Exchange, the travel agency said the Federal Court’s judgment contained “errors and inappropriate extensions of the law”.

“The penalties are manifestly excessive given the circumstances and the lesser penalties handed down in other cases, where the law was knowingly breached and there was a clear impact on the market,” the statement said.

Howard Rapke, partner at Holding Redlich, told SmartCompany the consumer watchdog takes anti-competitive behaviour very seriously.

“The ACCC sees it as very serious and as an important part of their statutory role,” he said. “Clearly the ACCC as a regulator wants to be seen to be deterring what it sees as anti-competitive conduct.”

Rapke said price-fixing carries large penalties because the fines are linked to the benefit the company in question has obtained.

“I think it’s crucial for officers and directors of a company to be very well informed about what the consequences are of a breach of the competition laws,” he said.

In the statement to the ASX, Flight Centre managing director Graham Turner said he looked forward to the appeal and believed it would be heard later this year.

In the meantime, the travel agency said it would comply with the Federal Court’s decision and not repeat the conduct prohibited by the court.