The Australian Competition and Consumer Commission (ACCC) took Qantas to court, alleging Qantas had fixed fuel surcharges on air cargo with other international airlines between 2002 and early 2006. The action has now resulted in a AUD 20 million fine, on top of an earlier USD 300 million fine in the US for price fixing.
The Federal Court in Sydney has ordered Qantas Airways Limited to pay $20 million in pecuniary penalties for breaching the price fixing provisions of the Trade Practices Act 1974.
The Australian Competition and Consumer Commission instituted proceedings on 28 October 2008 alleging Qantas reached an understanding with other international airlines in relation to the imposition of fuel surcharges on air cargo across its global networks between 2002 and early 2006.
Qantas admitted to making and giving effect to the understanding, repeatedly exchanging assurances amongst airlines in the implementation of fuel surcharge increases and reaching local agreements in certain Asian countries collectively.
"Cartels – particularly those that are engaged in by large businesses with broad application over a period of time – have a significant effect on consumers. They are an unseen fraud on the community that must be uncovered and punished," Australian Competition and Consumer Commission Chairman, Mr Graeme Samuel said.
This penalty reflects the serious nature of the cartel contraventions and Qantas’ large share of the Australian segment of the market. However, they also take into account the high cooperation Qantas gave in the course of the ACCC’s investigation. Qantas made extensive admissions and joined with the ACCC in making recommendations to the court as to the penalty and other orders which might be made.
"Having become aware of the conduct, Qantas undertook an exhaustive investigation. It gave the ACCC relevant documents and made staff available for interview. Qantas has promised to provide ongoing assistance in the ACCC’s investigations in relation to the conduct of other airlines," Mr Samuel said.
Justice Lindgren also made orders restraining Qantas from engaging in similar conduct for a period of three years and to pay $200,000 contribution towards the ACCC’s costs.
Justice Lindgren indicated he would publish his reasons in January 2009.