Japan Airlines penalised $5.5 million for price fixing

11 April 2011

The Federal Court in Melbourne today ordered a $5.5 million penalty against Japan Airlines International Co Ltd (JAL) for breaching the price fixing provisions of the Trade Practices Act 1974*.

Australian Competition and Consumer Commission chairman, Graeme Samuel said this matter represents the seventh international airline to settle the ACCC's air cargo proceedings.

"This outcome continues to send a clear message to those involved in cartel behaviour – the ACCC will not stop its endeavours to identify and bring to an end illegal price fixing conduct."

Today's penalties combined with those already ordered against other international airlines bring the total pecuniary penalties ordered in Australia against the illegal cartel to $46.5 million.

The ACCC instituted proceedings against JAL on 17 May 2010 alleging it reached understandings with other international airlines in relation to the imposition of:

  • fuel surcharges during the period December 2003 to October 2005; and
  • insurance and security surcharges during the period January 2003 to no later than October 2006

applied to the international carriage of freight from Singapore to destinations throughout the world, including Australia.

JAL admitted to making and giving effect to illegal price fixing understandings with other international airlines that each of them would impose a fuel surcharge and an insurance and security surcharge on cargo carried internationally by air across their networks.

Mr Samuel said JAL's admissions today were being made at a very early stage in the litigation against it.

"The company has agreed to facilitate further assistance from JAL personnel and to provide access to additional documents for use against other respondents.

"This cooperation has earned it a significant discount on the penalty that otherwise would have been sought," Mr Samuel said.

Justice Ryan also made orders restraining JAL from engaging in similar conduct for a period of five years and to pay a contribution towards the ACCC's costs of $200,000.

Proceedings against Singapore Airlines, Cathay Pacific, Emirates, Korean Air Lines, Air New Zealand and Thai Airways International remain on foot. The ACCC's proceedings against Garuda and Malaysian Air Lines are stayed pending the outcome of an appeal to the Full Federal Court under the Foreign States Immunities Act 1985 Cth.

*On 1 January 2011 as part of Australian Consumer Law amendments the Trade Practices Act 1974 was renamed the Competition and Consumer Act 2010.

Release number: 
NR 063/11
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