Friday, October 12, 2012

Another Air Freight Carrier Fined Millions for Freight Rate Collusion

Aussie Court Fines Top Sixty Eight Million Dollars
Shipping News Feature

AUSTRALIA - Emirates SkyCargo has become the tenth air freight carrier to settle in the Australian Courts in the matter of anti trust activities with regard to fuel and security charges upon which it colluded with others to artificially raise costs to prearranged levels and illegally setting inflated fuel and Customs charges landing itself with a total bill of A$10 million. The airline effectively traded as a cartel with others between 2001 and 2006 when shipping cargo between Australia and other countries including Indonesia.

Compared to what we have seen levied on the air carriers in the US and Europe by way of fines and imprisonment costs of A$7 million for the offences listed above plus A$3 million for conspiring with DAS Air Cargo to illegally fix freight tariffs all in breach of the Australian Competition and Consumer Act seems almost small potatoes. The Federal Court in Sydney’s judgement comes just a week before the Australian Competition and Consumer Commission’s (ACCC) main proceedings are due to commence against a number of other international airlines for alleged cartel conduct. In addition to the penalty, Justice Katzmann ordered Emirates to restrain from engaging in similar conduct for five years and to pay $500,000 towards the ACCC’s costs.

This story has run for several years now with fines for numerous air carriers including national airline Qantas. The ACCC’s proceedings against Singapore Airlines, Cathay Pacific, Air New Zealand and Thai Airways are due to be heard in the Federal Court in Sydney from 22nd October 2012. The ACCC is also proceeding against Garuda Indonesia following a High Court decision last month declaring that the airline was not eligible for foreign state immunity. ACCC Chairman Rod Sims, commented:

“This settlement with Emirates brings the total penalties ordered in Australia against international airlines involved in the cartel to $68 million. These are the highest penalties to have ever been ordered in an ACCC investigation. This result sends a strong message that the ACCC and the Australian courts will not tolerate any business, regardless of size or country of origin, engaging in cartel conduct that harms competition in Australia.

“Cartel conduct is illegal and often results in increased prices for consumers. The ACCC has been pursuing this large and complex litigation for four years, so the October trial will be an important milestone in our continuing fight to stop cartel conduct.”