EU court overturns airline cartel fines

The second highest court in the European Union has reversed a prior European Commission decision to impose over $850 million in fines on 12 airfreight carriers for alleged anti-competitive behavior.    The second highest court in the European Union has overturned a prior European Commission decision to impose over 790 million euros ($864 million) in fines on 12 airfreight carriers for alleged anti-competitive behavior.
   The General Court of the EU, based in Luxembourg, said it reversed the EC’s 2010 ruling because it was contradictory. The court said the EC accused the airlines of cooperating in a single cartel, but were only able to show proof of illegal activity by some carriers on some routes.
   The General Court noted its decision can be appealed at the European Court of Justice, the EU’s highest court, but on “points of law only.”
   For its part, the European Commission said it would “carefully examine the judgements and their implications as well as potential next steps.”
   “We note that the court did not rule on whether the commission could prove the infringement or not,” a spokesperson for the antitrust watchdog said.
   Under the ruling reversal, Air France KLM and British Airways could each avoid more than 400 million euros in combined fines for their alleged involvement in the cartel. The EC initially fined Air France KLM more than 300 million euros and British Airways 104 million euros.
   Other airfreight carriers that allegedly participated in the cartel included Air Canada, Cargolux Airlines International, Cathay Pacific Airways, Japan Airlines Corp., Latam Airlines Group, Deutsche Lufthansa, Martinair Holland, Qantas Airways, SAS and Singapore Airlines.
   The EC began investigating the airlines in 2005 after Lufthansa alerted the agency to potential anti-competitive behavior relating to fuel and security surcharges. Its decision was handed down in 2010, following raids of the companies in 2006 that the EC said proved the airlines had colluded with respect to rates on specific routes.
   Luxembourg-based Cargolux said in a statement it “welcomes the decision of the General Court of the European Union delivered today, annulling articles 1 to 5 of the European Commission’s 2010 decision in the alleged air freight cartel, including the full annulment of the €79.9 million fine previously levied on Cargolux.”