Flight Centre Limited v Australian Competition and Consumer Commission

In the matter of Flight Centre Limited v Australian Competition and Consumer Commission, the primary issue before the court was whether Flight Centre, an Australian travel agent, engaged in conduct that substantially lessened competition in the market for international passenger air travel. The Australian Competition and Consumer Commission (ACCC) had alleged that Flight Centre attempted to induce specific airlines to enter into agreements that would lessen competition, contrary to sections 45 and 45A of the Trade Practices Act 1974 (Cth). The court was tasked with determining the relevant market in which the alleged conduct took place and whether Flight Centre and the airlines were indeed competitors within that market.

The court identified the critical legal issue as the characterisation of the relevant market and the nature of the relationship between Flight Centre and the airlines. Specifically, the court had to decide whether the market in question was for booking and distribution services, or if it was exclusively the market for international passenger air travel services. The primary judge had found that there was competition between Flight Centre and the airlines in the distribution and booking services market. However, the court of appeal disagreed, finding that Flight Centre acted as an agent for the airlines and not as a competitor in the international passenger air travel market.

The court's reasoning hinged on the nature of the contractual relationship between Flight Centre and the airlines, as evidenced by the Passenger Sales Agency Agreement (PSAA). The court held that Flight Centre, as a travel agent, did not compete with the airlines in the market for international passenger air travel. Instead, Flight Centre acted as an intermediary, selling flights on behalf of the airlines. This agent-principal relationship meant that Flight Centre did not engage in conduct that could substantially lessen competition in the relevant market. Therefore, the court found that the primary judge had erred in his characterisation of the market and the competitive relationship between Flight Centre and the airlines.

The court allowed Flight Centre's appeal and dismissed the ACCC's cross-appeal. It set aside the orders made by the Court on 28 March 2014, dismissing Flight Centre's application with costs. Additionally, the ACCC was ordered to pay Flight Centre's costs of the appeal, and Flight Centre was ordered to pay the ACCC's costs of the cross-appeal.