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Saturday, June 22, 2024 | Back issues
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Airlines Duck EU’s|$864M Antitrust Fine

(CN) - The EU's lower court on Wednesday reversed an $864 million antitrust fine levied against several air cargo carriers by the European Commission, finding the regulator's decision was both contradictory and "internally inconsistent."

In 2010 - after years of unannounced inspections and a tip-off from Lufthansa Cargo - the commission found "a single and continuous" infringement of EU competition rules relating to fuel and security fees charged by a number of air cargo carriers, including Air Canada, Air France-KLM, British Airways, Cathay Pacific, Japan Airlines and Qantas.

The commission fined the carriers a combined $864 million except Lufthansa, which was granted immunity for the tip-off.

But the carriers appealed, arguing that the commission's decision was so vague they couldn't tell the nature and scope of the infringements they were accused of. Specifically, the decision mentioned four violations on different routes and at different times by different carriers, while the commission relied on grounds that the violation was single, worldwide, continuous, and included all routes.

In 13 similar opinions issued Wednesday, the European General Court overturned the commission's decision and annulled the fines - agreeing with the carriers that the decision was inconsistent and contradictory.

The Luxembourg-based court noted that both the principle of judicial protection and the fact that national court rely on - and are bound to follow - commission decisions mean the decisions must be clear, precise and unambiguous.

In this case, the EU court found that while the grounds of the commission's decision described a single cartel committing a single and continuous infringement of antitrust rules - made up of all the involved carriers and all their routes. But the operative part of the decision waffles between that scenario and one involving four separate single and continuous violations, hence the contradiction.

The court rejected the commission's argument that the differences between grounds and the operative part of its decision are attributed to leaving out carriers when they didn't operate the routes described, because the grounds described a single and continuous infringement committed by all carriers.

And aside from the contradictions between the grounds and the operative part of the decision, the court also found the grounds were inconsistent since it was "difficult to reconcile" a single cartel covering all the routes mentioned by the commission.

These inconsistencies and contradictions violated the carriers' right of defense and judicial review impossible, leading the court to decide that the only thing to do was overturn the commission's decision and annul the fines.

The commission has two months to appeal the annulment to the European Court of Justice.

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