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Thursday, March 28, 2024 | Back issues
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EU court splits on air cargo cartel fine 

The European Court of Justice partially upheld an $891 million fine levied against 11 air freight companies in 2010, agreeing some of the airlines involved had violated competition regulations while others had not.

LUXEMBOURG (CN) — The European Union’s second-highest court split Wednesday over an appeal from a group of cargo airlines over a 2010 fine for price-fixing.

The General Court of the European Court of Justice mostly upheld a 799 million euro ($891 million) fine against an airline cartel accused of colluding on cargo prices, siding against KLM and Air France but reducing fines against Air Canada and British Airways. 

It is the second time the Luxembourg-based court has heard complaints from the airlines over the 2010 fine. In an especially strongly worded 2015 decision, the same court sided with the 10 airlines who appealed the fine, describing a decision by the European Commission — the EU’s executive body — as “not entirely internally consistent.” 

In 13 separate decisions, the court upheld the fines against most of the carriers, writing in a press release that the commission had “amended the defective statement of reasons identified by the General Court.” Several companies, however, had their fines reduced. 

In 2010, Brussels alleged that Air Canada, Air France-KLM, British Airways, Cargolux, Cathay Pacific Airways, Japan Airlines, LAN Chile, Martinair, Qantas, SAS and Singapore Airlines had colluded to artificially raise prices on air freight from 1999 until 2006. Air France and KLM shouldered nearly one-third of the fine, some 300 million euros ($330 million).  

The scheme came to light when a 12th participant, German-based Lufthansa, revealed the conspiracy and was given immunity. The fines against Martinair, Japan Airlines, Air France-KLM, Cathay Pacific, LAN Chile, Qantas, Air Canada, Cargolux and British Airways were later reduced after they cooperated with the investigation. 

At the time, it was the largest cartel lawsuit in the EU’s history. After the commission’s conclusion, thousands of companies who had used cargo services with the airlines came forward with complaints.

In 2017, the commission doubled down, fixing the procedural errors the court had complained about and reissued the fine against 10 airlines. Qantas, the 11th company involved, had accepted the initial fine and did not participate in the appeal.

“Today’s decision ensures that companies that were part of the air cargo cartel are sanctioned for their behavior,” competition commission Margrethe Vestager said in a statement at the time. 

The commission and the airlines now have two months to decide if they want to appeal the decision. In a statement, KLM said it would consider its options in light of the ruling.

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Categories / Appeals, Business, International

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