Australian Competition and Consumer Commission v Cathay Pacific Airways Ltd

The Australian Competition and Consumer Commission (ACCC) brought proceedings against Cathay Pacific Airways Ltd (Cathay Pacific) for contraventions of section 45(2) of the Trade Practices Act 1974 (Cth). The ACCC alleged that Cathay Pacific engaged in price-fixing and collusive understandings with its competitors in the supply of services for the carriage of goods by air. Cathay Pacific admitted to the contraventions a week before the hearing. The court was tasked with determining whether the contraventions occurred, whether the proposed penalties were appropriate, and what matters were relevant to the imposition of penalty.

The court considered the nature of the contraventions, the admissions made by Cathay Pacific, and the penalties proposed. It noted the importance of deterrence and ensuring parity with penalties imposed in similar cases. The court found that the contraventions did occur and that the proposed penalties were appropriate, taking into account the admissions made by Cathay Pacific and the need for deterrence. The court also considered the submissions made by the ACCC and Cathay Pacific regarding the appropriate penalty.

The court made orders restraining Cathay Pacific from attempting to make, making, arriving at, or giving effect to, any contract, arrangement or understanding with any of its competitors for the supply of services for the carriage of goods by air, containing provisions which have the effect of fixing, controlling or maintaining the price or any part of the price at which it or any of them will supply those services in competition with each other. The court also restrained Cathay Pacific from attempting to enter, entering into, or giving effect to, any contract, arrangement or understanding with any of its competitors for the supply of services for the carriage of goods by air containing provisions to the effect that any of them will propose, develop, prepare, follow, implement, adopt or otherwise use any index, model, methodology or formula for the change of prices or any part of prices to be charged by any of them for services provided or which would otherwise likely be provided in competition with any other of them. The court ordered Cathay Pacific to pay a contribution towards the ACCC's costs of and incidental to these proceedings in the sum of $500,000.