The penalties follow the ACCC’s court action against a global air cargo cartel, which has so far resulted in penalties of A$132.5 million against 14 airlines, including Air New Zealand, Qantas, Singapore Airlines and Cathay Pacific. A further A$4 million was ordered for the imposition and level of insurance and fuel surcharges from Hong Kong, with Garuda also ordered to pay the ACCC’s legal costs. ACCC Chair Rod Sims commented:
“Price fixing is a serious matter because it unfairly reduces competition in the market for Australian businesses and consumers, and this international cartel is one of the worst examples we have seen. We are committed to pursuing cartel conduct from both domestic and overseas operators, and think the total penalty ordered against all the airlines involved sends a strong deterrent message, particularly when it comes to international anti-competitive conduct.
“The ACCC has recently entered more formal agreements with the FBI on cooperation and information sharing, and has strong links to other competition regulators worldwide, which mean our scope is much broader than Australian businesses.
“Any business anywhere that enters an agreement that affects Australian businesses and consumers should clearly take note. We are pleased to finally have resolution of this matter, which confirms our view that it was an important matter for us to appeal.”
The ACCC commenced legal action against the 14 international airlines between 2008 and 2010 under the Trade Practices Act (1974) for conduct that occurred between 2002 and 2006. All goods imported to Australia during the period by the airlines subject to ACCC litigation were impacted by the illegal price agreement including car parts, electronics, vegetables, seafood, flowers, and in one specific circumstance, meat to Australian troops in the Middle East.
Competition regulators around the world have taken action in relation to the air cargo cartel, with fines or penalties ordered against various airlines in Europe, the United States, Korea, New Zealand, Canada, and India.
This case is a long running one for the ACCC. In October 2014, the Federal Court initially dismissed the ACCC’s case against Air New Zealand and Garuda. The ACCC appealed the decision and the Full Court of the Federal Court upheld the ACCC’s appeal in March 2016. Garuda and Air NZ appealed the decision to the High Court, which unanimously dismissed the appeal in June 2017.
The Federal Court has imposed penalties totalling A$132.5 million in relation to airlines involved in the air cargo cartel, as follows:
Carrier | Date of Court Order | Penalty (A$) |
Qantas | Dec 2008 | $20 million |
British Airways | Dec 2008 | $5 million |
Air France & KLM | Feb 2009 | $6 million |
Cargolux | Feb 2009 | $5 million |
Martinair | Feb 2009 | $5 million |
Japan Airlines | April 2011 | $5.5 million |
Korean Air Lines | Nov 2011 | $5.5 million |
Malaysian | May 2012 | $6 million |
Emirates | Oct 2012 | $10 million |
Cathay Pacific | Dec 2012 | $11.25 million |
Singapore | Dec 2012 | $11.75 million |
Thai Airways | Dec 2012 | $7.5 million |
Air NZ | June 2018 | $15 million |
PT Garuda | May 2019 | $19 million |
Total | $132.5 million |
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