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Commission re-adopts air cargo cartel decision

The European Commission has re-adopted a 2010 cartel decision against 11 air cargo carriers and imposed fines totalling €776,465,000 for operating a price-fixing cartel.20 Mar 2017

The fines were imposed on Air Canada, Air France-KLM, British Airways, Cargolux, Cathay Pacific Airways, Japan Airlines, LAN Chile, Martinair, Qantas, SAS and Singapore Airlines for participation in a cartel between December 1999 and February 2006.

Lufthansa, and its subsidiary, Swiss International Air Lines were also involved in the cartel but received full immunity from fines.

The Commission's original decision was annulled by the General Court in December 2015 after the companies challenged the decision. The Court said the Commission had imposed the fines based on "contradictory lines of reasoning", and had based its decision on four infringements, some of which were not committed by all of the airlines concerned.

However, the Court did not rule on the existence of the cartel, and the Commission maintains that the carriers participated in a price-fixing cartel. It is therefore "adopting a new decision and re-establishing the fines", it said.

"This new decision addresses the procedural error identified by the General Court while remaining identical in terms of the anticompetitive behaviours targeted by the Commission. The decision confirms that the Commission will not let cartels go unpunished. Cartels are illegal and cause consumers and business to suffer," it said.

Competition law expert Ben Lasserson of Pinsent Masons, the law firm behind Out-Law.com said: "It was widely anticipated that the Commission would respond to the General Court's judgment by simply re-working and then re-adopting the 2010 decision, especially given that the Court had only found issues with the Commission's procedural approach. The practical impact of this development is that it offers some clarity once again to the various private damages actions that have been brought against the airlines on the basis of the Commission's cartel decision".

The fines have been fixed at the same level as in the 2010 decision for all the companies except Martinair, whose fine has been reduced to reflect a significant reduction in its turnover since 2010, the Commission said.