DOJ Probe Nets Three More Airlines

By Darren Shannon

A Dept. of Justice investigation of airfreight price fixing has claimed another three airlines, and boosts and already unprecedented fine tally by another $214 million.

The latest carriers to plead guilt to their involvement in a global cartel are Korea’s Asiana Airlines, Japan’s Nippon Cargo Airlines, and Luxembourg’s Cargolux.

With these pleas, the Justice Dept. has now found 15 airlines guilty of fixing global airfreight prices (DAILY, Jan. 23). Asiana has also pleaded guilty to fixing passenger fares from the U.S. to Korea.

“Fifteen airlines and three executives have been prosecuted to date for their participation in price-fixing agreements that inflicted a heavy toll on American businesses and consumers as well as the global economy,” said Scott Hammond, acting assistant attorney general in charge of the Justice Dept.’s antitrust division.

“The Department will continue its investigation into this criminal conduct until all co-conspirators are brought to justice.”

According to charges filed April 9 in the U.S. District Court for the District of Columbia, Cargolux “engaged in a conspiracy in the United States and elsewhere to eliminate competition by fixing the cargo rates charged to customers for international air shipments” from September 2001 to Feb. 14, 2006.

Similar charges say Nippon Cargo Airlines engaged in the same activity between April 2000 and February 2006, while Asiana’s cargo and passenger price fixing occurred from January 2000 to February 2006.

On Feb. 14, 2006, European and U.S. regulators raided the offices of several airlines — including Lufthansa, which has been granted conditional immunity from fines by several authorities including the DOJ — and marked the beginning of an investigation that has unearthed a global cartel (DAILY, Feb. 13).

Under their plea deals, the three latest carriers will pay $214 million in criminal fines, with Cargolux paying $119 million, Asiana $50 million, and Nippon Cargo $45 million. U.S. law can impose a $100 million maximum fine, twice the gain derived from the crime or twice the loss suffered by the victims of the crime, whichever is larger.

With these payments, fines paid to the Justice Dept. so far total $1.6 billion, a record for the government agency’s antitrust division.

Image: Wikipedia

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