Emirates and Singapore Airlines have lost their Federal Court bid to prevent their pursuit by the ACCC for alleged involvement in a cartel to fix the price of fuel and security surcharges applied to their air cargo customers.
The two airlines had challenged the validity of compulsory notices issued by the ACCC requiring the production of documents and other information in relation to its cartel behaviour investigations in this country.
In lay terms, the two airlines are alleged to have conspired in a cartel — which included Qantas and British Airways and other major carriers — to rob their customers by fixing certain prices.
Qantas admitted guilt in a plea bargain with the US Department of Justice late in 2007 which led early in 2008 to a fine of $68.7 million and the jailing for six months in America of their former US head of freight, Bruce McCaffrey.
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Five other Qantas executives avoided the risk of jail terms through not being resident in the US, and not being liable for imprisonment for such offences under Australian law.
In October last year Qantas similarly consented to pay a $20 million fine in the Federal Court in settlement of a case brought against itself and five other airlines by the ACCC for cartel activities in Australia.
Qantas is also reported to be facing civil prosecutions for hundreds of millions of dollars in compensation from the customers it robbed.
The cartel existed between 2000 and 2006, and was found to have agreed on the manner and extent for inflating fuel surcharges applied to consignments, and after the terrorist attacks of 11 September 2001, to the security and war risk fees that were consequently imposed.
The chairman of the ACCC, Graeme Samuel, said Emirates and Singapore Airlines refused to produce many of the documents the competition regulator sought.
In a statement, he says “The ability to compel production of documents and information in relation to cartel investigations is an essential part of protecting Australian consumers.
“Arguments that we cannot investigate cartels formed outside Australia affecting Australians, or that the market in which goods are carried to Australia is not one to which the act applies, are against….the welfare of Australians.”
Or, in other words, “you’re pinched.”
Emirates and Singapore Airlines are major players in the air cargo market in Australia. If they are found to have played the game the same way Qantas and others have already admitted to playing it they can expect substantial penalties and civil actions by their customers.