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Emirates fined Aus$10 million for price fixing

By control on October 16, 2012

The Federal Court in Sydney has fined Emirates Airline AUD$10 million for engaging in price fixing, an action that jump-starts the Australian Competition and Consumer Commission’s formal proceedings against a number of airlines. The addition of Emirates — the 10th airline to settle with the Australian government — brings the total number of fines levied by the ACCC during these proceedings to $68 million.

ACCC Chairman Rod Sims said these are highest penalties to have ever been imposed during an ACCC probe. “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,” he said in a statement. “Cartel conduct is illegal and often results in increased prices for consumers.”

In the case of Emirates, the government watchdog charged the carrier AUD$7 million for participating in an airfreight cartel from October 2001 to May 2006 and AUD$3 million for conspiring with DAS Air Cargo to fix prices on airfreight shipments from Australia. Federal Court judge Anna Katzmann also ordered Emirates to restrain from this behavior for five years and to pay $500,000 toward the ACCC’s costs.

Next week, the Federal Court in Sydney will begin hearing the Australian commission’s cases against Singapore Airlines, Cathay Pacific, Air New Zealand and Thai Airways. The ACCC is also forging ahead with its case against Garuda Indonesia, following a High Court ruling in September that the airline was ineligible for foreign state immunity.

“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,” Sims added.

The ACCC isn’t the only government agency doling out fines for price fixing, however. In September, the U.S. Department of Justice charged Japanese forwarder Yamato Global Logistics Japan Co. Ltd. $2.3 million for conspiring to fix fees on airfreight shipments from Japan to the U.S. from September 2002 until at least November 2007.

The DOJ has levied more than $100 million in criminal fines since it launched its price fixing investigation in early 2006. Last year, the U.S. agency slapped six other Japanese freight forwarders with fees totaling $46.8 million for their participation in an airfreight cartel.

The High Court of New Zealand has also taken a stand against price fixing and most recently ordered Japan Airlines to pay NZ$2.28 million for participating in an airfreight cartel. In July, Korean Air was charged with similar behavior and became the latest carrier to settle with Canada’s Competition Bureau.

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