Clifford Chance

The High Court's Flight Centre decision signals some turbulence ahead for distributors, agents and online platforms

31 January 2017

On 14 December 2016, the High Court majority ruled in favour of the Australian Competition and Consumer Commission (ACCC) in its case against Flight Centre. The High Court  agreed with the ACCC that Flight Centre was in competition with its airline suppliers in the market for the supply of airline tickets notwithstanding that Flight Centre existed in that market as agent for each airline.

The decision is important in that it overruled the Full Federal Court's approach to agency and took a horizontal 'per se' approach to an arrangement which has previously been assessed in a 'vertical' context. By doing so, the majority appeared to focus more on the nature of competition than the form of contractual arrangements and commercial practicalities between Flight Centre and the airlines.

The decision may have significant implications depending on the approach taken by the ACCC. Businesses that either are, or supply to, distributors, agents or online platforms, should reassess their relationships and take steps to ensure compliance with the new interpretation of the law.

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