EC re-adopts decision and €776m fines on air cargo carriers for “price-fixing cartel”

EC re-adopts decision and €776m fines on air cargo carriers for “price-fixing cartel”

The European Commission (EC) has re-adopted a cartel decision against 11 air cargo carriers and imposed a fine totalling more than € 776m for operating what it describes as a “price–fixing cartel”. The EC first made a decision to impose fines of nearly €800m on the 11 air cargo carriers in November 2010, but this original decision was annulled by the European Union (EU) General Court in December 2015 on procedural grounds.

However, said the EC, while the General Court concluded that there had been a procedural error it did not rule on the existence of the cartel.

Now, in a statement issued on Friday (17 March), the EC said that it has made a new decision which “addresses the procedural error identified by the General Court while remaining identical in terms of the anticompetitive behaviours targeted by the Commission”.

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.

All but one of the companies (Qantas) challenged the decision – which led to the General Court intervention.

In the statement issued on Friday, EC Commissioner Margrethe Vestager, in charge of competition policy, commented: 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.

The EC’s decision relates to activities that took place from December 1999 to February 2006, in the airfreight services market covering flights from, to and within the European Economic Area.

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

The EC said that its new decision “confirms that [it] will not let cartels go unpunished”.

The new fines have been lowered (from €800m to just $776m in total) to reflect the carriers’ cooperation with the Commission under the Leniency Notice.

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