Emirates receives $10 million fine for price fixing

UAE based carrier, Emirates has been ordered to pay $10 million in penalties for engaging in cartel conduct, including price fixing of fuel and other surcharges. Ordered by the Federal Court in Sydney today, the decision comes one week ahead of the Australian Competition and Consumer Commission’s (ACCC) main proceeding, which is due to commence against a number of international airlines including Singapore Airlines, Air New Zealand and Cathay Pacific. Emirates is the tenth airline to settle in these proceedings, bringing total penalties against airlines involved to up to AU$68 million. The competition watchdog’s chairman Rod Sims said this case has handed out “the highest penalties” in an ACCC investigation and would send a “strong message” that this type of business would not be tolerated. “Regardless of size or country of origin - engaging in cartel conduct that harms competition in Australia,” Mr Sims said. “Cartel conduct is illegal and often results in increased prices for consumers.” Also as part of the settlement, Emirates was ordered to restrain from engaging in similar activities for five years and to pay a further AU$500,000 towards ACCC costs. Although proceedings against Emirates commenced in 2009, the ACCC will face Singapore Airlines, Cathay Pacific, Air New Zealand and Thai Airways in Federal Court in Sydney on 22 October 2012 and is awaiting the High Court decision for proceedings again Garuda Indonesia. “The ACCC has been pursuing this large and complex litigation for four years, so the October trial will be an important milestone in our continuing fight to stop cartel conduct,” Mr Sims added. This week the Commission also entered legal proceedings with agency Group, Flight Centre for allegations of price-fixing. Running for up to three weeks, the Group was accused of making an “implicit threat” to Singapore Airlines on order to maintain commissions. Sourced: etravelblackboardasia