JAL to pay $110 million for price collusion
Japan Airlines agreed to plead guilty and pay a $110 million fine for its role in an international air cargo price fixing scheme, the U.S. Justice Department announced.
In February 2006, the Justice Department and European Commission launched a global investigation of possible price fixing of cargo fuel surcharges and other fees in the U.S. and European air cargo markets.
According to charges filed in a U.S. District Court on Wednesday, JAL engaged in a conspiracy with other airlines to jointly set prices during a six-year period beginning in April 2000. JAL earned nearly $2 billion from its cargo flights to and from the United States.
'This price-fixing conspiracy inflicted a heavy toll on American businesses and consumers,' said Thomas O. Barnett, assistant attorney general in charge of the department's antitrust division.
JAL is the fourth airline to settle and cooperate with the U.S. government for anticompetitive behavior in the air cargo sector. Late last year Australian carrier Qantas Airways agreed to pay the U.S. government $61 million to settle charges of fixing fuel surcharges. British Airways and Korean Air Lines paid separate $300 million fines after admitting their part in fixing passenger and cargo fuel surcharges. British Airways was also fined '121.5 million ($247 million) in August 2007 by the U.K. Office of Fair Trading.
The charges laid out JAL’s role in the conspiracy, which included discussions among carriers to determine and enforce agreed upon rates.
Competition authorities around the world are expanding investigations of cartel behavior in the air cargo and freight forwarding industries.
In December, the European Commission also initiated formal antitrust proceedings against two-dozen airlines, including JAL, and British Airways.
Germany’s Lufthansa Airlines received immunity from U.S. and EU prosecutors for being the first to admit its role in the pricing scheme and cooperate with authorities.
Earlier this week, Japan’s Fair Trade Commission raided the offices of 13 companies, including Nippon Express, Kinetsu Express and Yusen Air & Sea Service, Vantec World Transport, Nishi-Nippon Railroad and the Japan Aircargo Forwarders Association as part of an investigation of price fixing on express freight forwarding services.