December 1, 2014

Deutsche Bahn announce intent to sue airlines over 1999-2006 cargo price fixing practises

Back in November 2010, 11 airlines were fined by the European Commission for fixing the price of air cargo between 1999 and 2006. The fines totalled €800m, ranging from €339.6 for Air France-KLM (including Martinair) to €8.2m for LAN Chile. The maximum fine was based on 10% of 2009 turnover for each airline. Interestingly, at the time, Lufthansa who were also involved were not fined, basically because they had revealed the existence of the price-fixing practise. However the fines by the European Commission left the gates open for businesses who had suffered financially as a consequence of the actions of these airlines to seek their own financial compensation. The US Department of Justice had already charged 18 airlines and a number of executives in its investigation into the existence of a cargo cartel and had imposed more than US$1.6bn in fines. At the time a group of firms, including Swedish telecoms group Ericsson and Dutch electronics business Philips began proceedings to sue Air France-KLM and its Martinair subsidiary for €400m.
Roll forward to today and it has been announced that Deutsche Bahn, which operates in over 130 countries, transporting more than 390 million tonnes of freight a year via land, rail, sea and air, and with revenues last year of €39.1bn, are to sue a number of airlines involved in the price-fixing operation, including Lufthansa, BA, Japan Airlines, Air France-KLM, Scandinavia’s SAS, Qantas, Cargolux, Martinair and All Nippon Airways. Deutsche Bahn declined to comment further on the announcement other than pointing to an invitation to a media briefing on Monday “on a multi-billion dollar lawsuit seeking damages from air cargo carriers”. Deutsche Bahn have already announced that it is suing in the United States for the same price fixing practise. It is understood that Deutsche Bahn would be seeking the biggest damages settlement of up to €1.76 bn from Lufthansa.



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