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Malaysia Airlines Cargo fined for price fixing

By control on June 15, 2012

Following an action by the Australian Competition and Consumer Commission, the Federal Court in Sydney has fined Malaysia Airlines Cargo $6 million for engaging in price fixing. Malaysia Cargo has been found guilty of being part of a cartel from 2001 to 2005.

According to an ACCC press release, Malaysia Airlines Cargo conspired to set security surcharges between October 2001 and October 2005; fixed fuel surcharges between April 2002 and September 2005; and conspired to set Customs fees between May 2004 and October 2005. The ACCC brought the charges against Malaysia on April 9, 2010.

Cases against Singapore Airlines, Cathay Pacific, Emirates, Air New Zealand and Thai Airways are ongoing. But the ACCC, Australia's consumer watchdog, has already seen $58 million in fees imposed against members of the cartel. In 2008, the commission saw price fixing fines levied against Qantas and British Airways. In February 2009, the ACCC saw Air France-KLM hit with a $6 million fine, and Martinair and Cargolux fined $5 million each.

“The ACCC’s focus on stopping cartel conduct has sent a strong message. It is crucial for the proper functioning of business in Australia that the ACCC continues to tackle cartel conduct with the full force of the law," Rod Sims, the organization's chairman, said in a statement. "Cartel conduct is damaging and unlawful because it harms competition and usually inflates prices for consumers."

The Australian High Court's actions mirror similar price-fixing penalties levied by authorities around the world against carriers and forwarders. One of the most recent cases came out of the European Union, where authorities fined 14 freight forwarders a combined €169 million for participating in price-fixing activities. In the U.S., the Department of Justice has meted out fines totaling more than $1.8 billion. The last U.S. has also gone after freight forwarders; the most recent ruling, which occurred in September, went against six Japanese freight forwarders to the tune of $46.8 million.

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