Travel company has flown into hot water over price fixing allegations.
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The competition watchdog has instituted proceedings in Brisbane’s Federal Court against travel agency Flight Centre, alleging it attempted to induce competitors to enter into price fixing arrangements with it.
The Australian Competition and Consumer Commission alleges that, on six occasions between 2005 and 2009, the company attempted to induce Singapore Airlines, Malaysian Airlines and Emirates to agree to stop directly offering their own fares at prices less than Flight Centre offered.
Flight Centre’s prices included both the amount collected for the airfare (paid to the airlines) plus commission, the watchdog alleges.
The watchdog also alleges that the purpose and likely effect of the arrangements sought by Flight Centre was to maintain its level of commissions.
“Such arrangements constitute price fixing arrangements in contravention of section 45 of the Competition and Consumer Act 2010 (through the former s.45A of the Trade Practices Act 1974),” the ACCC said in a statement.
However, Flight Centre Managing Director, Graham Turner, denies any wrongdoing saying: “I am absolutely confident we will win our case and show our customers we always have the lowest price for any airline ticket.”
Turner also branded the ACCC case as “pure stupidity” saying “we don’t know where these trumped up charges [by the ACCC] are coming from.”
The watchdog is seeking injunctions and costs in its case against Flight Centre listed for Friday 13 April 2012 before Justice Logan.