Air Carriers Plead Guilty to Price-Fixing Conspiracy

Ottawa, June 26, 2009 — The Competition Bureau announced today that international air carriers Air France, KLM and Martinair have pleaded guilty and were fined a total of $10 million for their part in an air cargo cartel affecting Canada.

The carriers admitted to fixing surcharges on air cargo exported on certain routes from Canada between April 2002 and February 2006. In particular, the companies admitted to communicating with competitors about the amount and timing of fuel surcharges. The Bureau estimates that the three companies imposed air cargo surcharges totalling approximately $31.5 million during the period of the conspiracy.

"The cooperation of these parties through the Bureau's leniency program will assist in our ongoing conspiracy investigation," said Melanie L. Aitken, Interim Commissioner of Competition. "Had these companies not cooperated, the Bureau would have recommended harsher penalties against these companies, including significantly higher fines."

Société Air France (Air France), Koninklijke Luchtvaart Maatschappij N.V. (KLM) and Martinair Holland N.V. (Martinair) were convicted in Federal Court of violating section 45 of the Competition Act, which makes any agreement between competitors to fix prices that results in an undue lessening of competition in Canada a criminal offence. Current available penalties for price-fixing include fines of up to $10 million per party, imprisonment to a maximum term of five years, or both.

The fines imposed on the companies were as follows: Air France — $4 million; KLM — $5 million; and Martinair — $1 million. The Bureau's investigation into the alleged conduct of other air cargo carriers continues.

This investigation was commenced following a confidential immunity application. Under the Bureau's Immunity Program, the first party to disclose to the Bureau an offence not yet detected, or to provide evidence leading to the filing of charges, may receive immunity from the Director of Public Prosecutions, provided the party fully cooperates with the Bureau.

Parties that approach the Bureau early in its investigation of criminal activities may also be able to benefit from leniency, such as reduced penalties, in return for their cooperation. Obtaining the cooperation of implicated parties through the Bureau's Immunity and Leniency Programs is one of the Bureau's best weapons to combat these secret criminal anti-competitive agreements.

The Competition Bureau is an independent agency that contributes to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.


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