Travel company Flight Centre is facing millions of dollars in penalties across the Tasman, after the Australian competition watchdog won a court challenge over international airfare pricing.
The Australian Competition and Consumer Commission has won its High Court battle with Flight Centre in a dispute about whether the travel agency breached competition laws over international airfares.
Between 2005 and 2009, Flight Centre made approaches to three airlines, Singapore Airlines, Malaysia Airlines, and Emirates, over discount fares.
The agency was accused of trying to induce the airlines into contracts on fare prices, after it became concerned they were selling tickets directly to customers at lower rates than Flight Centre could offer.
In a series of emails, Flight Centre asked the airlines to stop selling tickets at lower prices than those available to travel agents.
The company threatened to stop selling tickets for the three airlines unless they agreed.
Flight Centre was fined $A11 million after an initial finding in the Federal Court, but that was overturned on appeal.
The key question facing the Australian High Court was whether the airlines and Flight Centre were competing against each other in the same market.
Today, four of the five justices hearing the case found Flight Centre had breached competition law in asking the airlines to stop issuing cheaper tickets directly to customers.
Chief Justice Robert French offered a dissenting opinion that Flight Centre was not in direct competition with the airlines, and thus had not breached the law.
The court ordered the case return to the Federal Court to determine the penalties.