March 29 - Yesterday, the European Commission issued USD225 million penalties on a number of airfreight companies, including Kuehne + Nagel, UPS, and Expeditors for what the regulatory body said was a breach of E.U. antitrust rules during the years 2002-2
The European Commission charged the firms in February 2010 with fixing prices in the air freight forwarding business, in breach of EU antitrust rules. The charges followed raids on the companies three years earlier.
The freight forwarders colluded on surcharges and charging mechanisms concerning important trade lanes, in particular the Europe-USA. and the China-Hong Kong-Europe lanes, the EC said in a statement.
The Commission segregated the cartels into four groups: New Export System, Advance Manifest Currency Adjustment, and Peak Season Surcharge.
Kuehne + Nagel was hardest hit with approximately USD54 million in fines while fellow German rival Deutsche Postand its DHL and Exel forwarding units were granted immunity for being the informant in the collusion case that led to a surprise raid by the E.C. in late 2007.
Kuehne + Nagel challenged the commission's conclusion and said that it is considering an appeal against the decision before the European courts.
The Commission said that in most cases, the freight forwarding companies took specific measures to conceal the cartel behavior, such as organising a so-called Gardening Club and using code names based on vegetables when referring to fixing prices, and using a specific Yahoo email account for exchanges between the cartel participants.
The European Commission vice president in charge of competition policy, Joaquín Almunia, said in the statement: "In times of crisis, it is all the more important to stamp out the hidden tax that cartels impose on our economy. These cartels affected individuals and companies shipping goods on important trade lanes. Companies should be aware that crossing the line and colluding on prices comes at a high price, as today's decision illustrates."