‘Contradictory’ price fixing cartel fine overturned

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Fines of 790 million euros ($868 million) imposed by the European Commission against airlines for fixing fuel and security surcharges has been overturned, as the decision was ‘contradictory’.

In 2010, the commission had fined Air Canada, Air France, British Airways, Cargolux, Cathay Pacific, Japan Airlines, LATAM Airlines Group, Martinair, Qantas, SAS Cargo and Singapore Airlines Cargo between 8.2 million and 182.9 million euros for fixing surcharges between 1999 and 2006.

Lufthansa Group, which covers Lufthansa Cargo and Swiss International Airlines, was granted immunity from action having applied under the 2002 Leniency Notice. It said anticompetitive contacts existed between airlines for fuel and security surcharges.

The commission carried out unannounced inspections of 14 and 15 February 2006 and it fined the airlines in November 2010, saying, “several carriers coordinated their behaviour as regards the pricing of freight services”.

In response, the carriers appealed the decision saying it “did not allow them to determine the nature and scope of the infringement or infringements that they were alleged to have committed.”

Four infringements had been identified but it was decided that the Commission’s decision did not make clear whether the carriers had committed four separate offences or one continuous offence. “The Court concludes that the internal inconsistencies in the contested decision were liable to infringe the applicant’s rights of defence and prevent the Court from exercising its power of review.”

Cargolux, which had been fined 79.9 million euros, says: “Cargolux Airlines International welcomes the decision of the General Court of the European Union delivered today [16 December], annulling articles one to five of the European Commission’s 2010 decision in the alleged air freight cartel, including the full annulment of the 79.9 million euro fine previously levied on Cargolux.”

LAN Cargo, part of LATAM Group, which had been fined 8.2 million euros, says: “LAN Cargo fully collaborated with the applicable authorities over the years of the investigation. The company would like to reaffirm once again its commitment to strictly comply with the applicable laws of the countries where it operates.”