3 airlines fined $10M for fixing air-cargo rates
Last Updated: Friday, June 26, 2009 | 6:19 PM ET
CBC News
Air France and KLM were fined $4 million and $5 million, respectively, for fixing air cargo rates of some routes. (Remy de la Mauviniere/Air Canada)Three related international airlines have been fined a total of $10 million for fixing air cargo rates on some routes out of Canada, the Competition Bureau said Friday.
Air France, KLM and Martinair pleaded guilty to fixing surcharges on air cargo exported from Canada between April 2002 and February 2006, the bureau said in a news release.
KLM and Air France are separate brands operated by the same company, and KLM owns Martinair.
The Canadian fines are in addition to ones already levied by other countries against the three airlines and many others for fixing cargo rates.
The U.S. Justice Department has fined 15 airlines more than $1.6 billion US, and three executives had been sentenced to jail time, the deparment announced in April.
Air France-KLM agreed to pay a $350 million US, "the second highest fine ever levied in a criminal antitrust prosecution," the department said last year.
In Australia, Air France-KLM was fined about $5.6 million Cdn earlier this year, and Martinair about $4.5 million Cdn. Australian regulators also nailed Singapore Airlines, Qantas and British Airways PLC.
Airlines co-operated with Competition Bureau
In Canada, the surcharges totalled $31.5 million during the time the airlines communicated with competitors about the amount and timing of the surcharges.
However, the bureau does not know how much of the $31.5 million was the result of the conspiracy and how much was legitimate, a spokeswoman said.
The fines would have been higher had the airlines not co-operated with the bureau's continuing investigation of other carriers, said Melanie L. Aitken, Interim Commissioner of Competition.
"Had these companies not co-operated, the bureau would have recommended harsher penalties against these companies, including significantly higher fines," said Aitken
The companies benefitted from the bureau's leniency program, which gives a break to companies that approach the regulators early during an investigation.
Getting conspirators to co-operate "is one of the bureau’s best weapons to combat these secret criminal anti-competitive agreements," the news release said.
KLM was fined $5 million, Air France $4 million and Martinair $1 million.
The bureau began its investigation after an unnamed party disclosed the conspiracy. The party made a "confidential immunity application," which means it may have got immunity from prosecution.
The airlines were convicted in Federal Court of violating the section of the Competition Act which makes any agreement between competitors to fix prices a criminal offence if it results in an undue lessening of competition in Canada.
