EU regulator to re-impose €776m fine for air cargo price-fixing cartel

Air cargo

The EU Commission has re-adopted a cartel decision against 11 air cargo carriers for price-fixing, which took place from December 1999 to February 2006.

In November 2010, fines of nearly €800m were imposed, but this decision was annulled by the General Court on procedural grounds.

The cartel arrangements consisted of numerous contacts between airlines, at both bilateral and multilateral level to fix the level of fuel and security surcharges.

All but one of the companies (Qantas) subject to the 2010 decision challenged the decision before the EU’s General Court. In December 2015, the General Court annulled the Commission’s decision against the 11 cartel participants that appealed, concluding that there had been a procedural error. However, it did not rule on the existence of the cartel.

The companies fined in 2010 were Air Canada, Air France-KLM, British Airways, Cargolux, Cathay Pacific Airways, Japan Airlines, LAN Chile, Martinair, Qantas, SAS and Singapore Airlines. A 12th cartel member, Lufthansa, and its subsidiary, Swiss International Air Lines, received full immunity from fines, as it brought the cartel to the attention of the Commission.

This new decision addresses the procedural error identified by the General Court while remaining identical in terms of the anti-competitive behaviours targeted by the Commission.

Commissioner Margrethe Vestager, in charge of competition policy, said: “Millions of businesses depend on air cargo services, which carry more than 20% of all EU imports and nearly 30% of EU exports. Working together in a cartel rather than competing to offer better services to customers does not fly with the Commission. Today’s decision ensures that companies that were part of the air cargo cartel are sanctioned for their behaviour.”

Source: European Commission