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In competition with each other? Implications of the apparently divergent outcomes in Flight Centre and ANZ

Andrew Christopher and Thea Fabriciuse
(2015) 23(1) Australian Journal of Competition and Consumer Law 6



This article discusses the competition law concerns that arise from price arrangements between suppliers and distributors, particularly in the context of agency distribution agreements.The apparently diverging decisions in ACCC v ANZ and ACCC v Flight Centre introduced a level of uncertainty into Australian law as to whether an agent may be “in competition” with its principal. This is significant because, under the cartel provisions in Div 1 of Pt IV of the Competition and Consumer Act 2010 (CCA), price-fixing is subject to a per se prohibition whenever parties are found to be in competition with each other. The article discusses the reasoning in both cases, and potential implications of the Flight Centre decision on agency distribution arrangements if it is held to be correct on appeal. Multi-distribution models containing most favoured nation agreements or “platform parity agreements” are increasingly prevalent in the context of e-commerce and online shopping and highlight the potential for vertical arrangements to have both pro- and anti-competitive effects. The article provides a cross-jurisdictional analysis of the judicial treatment of vertical price arrangements in agency distribution agreements in Australia, the European Union and the United States. Under American and European law, unlike under the CCA, “vertical” price arrangements are explicitly distinguished from “horizontal” arrangements and a “genuine agency” exemption is available for certain distribution arrangements. This defence allows efficient agency distribution agreements to be protected from vertical price-fixing claims. In this context, the possible future direction of Australian law is considered pending the appeal judgments from the ANZ and Flight Centre cases.



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