Brussels, 09/11/2010 (Agence Europe) - On 9 November 2010, the European Commission revealed the scale of fines on airlines involved in a price-fixing cartel for cargo services (reported on in the previous newsletter). Eleven airlines have been fined a total of €799.445,000 for involvement in the cartel that lasted from December 1999 to February 2006.
The companies met during this period to coordinate prices for fuel and security surcharges. Cartel members contacted each other so as to ensure that worldwide airfreight carriers imposed a flat rate surcharge per kilo for all shipments. The cartel members extended their cooperation by introducing a security surcharge and refusing to pay a commission on surcharges to their clients (freight forwarders).
On the other hand, Commission allegations of collusion on two other surcharges and regarding freight rates in the Statement of Objections were dropped from the case for insufficient evidence. The Commission also dropped charges against another 11 carriers and one consultancy firm which had previously received the Statement of Objections for the same reason.
In setting the fines, the Commission took into account the sales of the companies involved in the market concerned, the very serious nature of the infringement, the European Economic Area (EA)-wide scope of the cartel and its duration. All carriers were granted a 50% reduction on sales between the EEA and third countries in order to take into account the fact that on these routes part of the harm of the cartel fell outside the EEA. All carriers received a reduction of 15% on account of the general regulatory environment in the sector which can be seen as encouraging price coordination.
In calculating the increased or reduced fines, the Commission took account of issues like repeated abuse or lesser degree of participation in the cartel, the complexity of regulatory systems outside the EU, the degree of cooperation with the investigation by the various companies, fines already levied on the same companies outside the EU for the same abuses, and so on. The fines are as follows (in euros, followed by percentage reduction agreed upon): Air Canada (21 037 500; 15%); Air France (182 920 000; 20%); KLM (127.160; 20%); Martinair (29 500 000; 50%); British Airways (104 040 000; 10%); Cargolux (79 900 000; 15%); Cathay Pacific Airways (57 120 000; 20%); Japan Airlines (35 700 000; 25%); LAN Chile (8 220 000; 20%); Qantas (8 880 000; 20%); SAS (70 167 500; 15%); and Singapore Airlines (74 800 000).
The fine on SAS includes a 50% increase because of its involvement in another price-fixing cartel in the past. Lufthansa's fine was cancelled because it declared the cartel to the Commission. Five airlines requested further reductions, claiming inability to pay. Commissioner Almunia ruled out taking court action for damage and interests at EU level because of the lack of any relevant EU rules but some Member States may decide to take legal action at national level. (F.G. trans fl)