Flight Centre Ltd v Australian Competition and Consumer Commission (No 2)

In the case of Flight Centre Ltd v Australian Competition and Consumer Commission (No 2), the primary issue revolved around the imposition of penalties for Flight Centre's contraventions of section 45(2)(a)(ii) of the Trade Practices Act 1974 (Cth), which now falls under the Competition and Consumer Act 2010. The dispute involved allegations of price fixing in the market for the sale of international airline tickets. Flight Centre, a significant Australian public company, was accused of attempting to engage in price fixing with three international airlines. The conduct was deliberate and involved senior management, including the chief executive officer, who believed their actions to be lawful. The ACCC argued that the conduct, if successful, would have eliminated price competition and affected hundreds of millions of dollars of commerce.

The legal issues before the court encompassed the appropriate method for determining a pecuniary penalty under section 76 of the Competition and Consumer Act 2010. The court needed to consider the nature and extent of the contraventions, the circumstances in which they occurred, and whether Flight Centre had previously engaged in similar conduct. The court also had to address the appropriate weight to be given to the statutory maximum penalty of $10 million. The case required an evaluative approach, taking into account all relevant circumstances to determine a meaningful penalty. The court examined the five contraventions as individual instances of conduct rather than a continuous course of conduct.

In its reasoning, the court considered the gravity of the contraventions, the deliberate nature of Flight Centre's conduct, and the involvement of senior management. The court noted that Flight Centre's market power made its threats credible and that the conduct, if successful, would have significantly affected competition. The court decided that Flight Centre was not entitled to any discount for cooperation or admissions. After careful evaluation, the court determined that the appropriate penalty should be $12.5 million, with specific amounts allocated to each contravention. The court remitted the penalty aspect of the appeal and cross-appeal to itself for resentencing and set aside the previous penalty order, substituting it with the new total penalty of $12.5 million.