Cargolux Pleads Guilty in Air Cargo Price-fixing Conspiracy

Ottawa, October 28, 2010 — The Competition Bureau announced today that Cargolux Airlines International S.A. has pleaded guilty in Federal Court and was fined $2.5 million for its role in an air cargo cartel affecting Canada.

Cargolux admitted that it engaged in a conspiracy to fix air cargo fuel surcharges for international air cargo transportation services from Canada between April 2002 and February 2006.

"Price-fixing is a serious crime that denies the benefits of competition and artificially increases the prices we pay for goods and services," said Melanie Aitken, Commissioner of Competition. "The Bureau will not hesitate to take action against conspirators when it uncovers evidence that the law has been broken."

Cargolux's penalty brings the total fines in the Bureau's air cargo investigation to more than $17 million. In 2009, Air France, KLM, Martinair, Qantas, and British Airways each pleaded guilty to fixing air cargo surcharges for shipments on certain routes from Canada. The Bureau's investigation into the alleged conduct of other air cargo carriers continues.

The Bureau's investigation has benefited from the cooperation of certain air cargo carriers through the Bureau's Leniency Program. This program creates incentives for parties to address their criminal liability by co-operating with the Bureau in its ongoing investigation of other alleged cartel participants.

Under the Competition Act, an agreement between competitors to fix prices, allocate markets or restrict output in Canada is a criminal offence. Following amendments to the Act that came into force in March 2010, penalties for violations of the conspiracy provision include fines of up to $25 million and prison terms of up to 14 years, or a combination of both. At the time of the price-fixing conduct in question, penalties were capped at fines of up to $10 million and prison terms of up to five years, or a combination of both.

The Competition Bureau ensures that Canadians prosper from the benefits of a competitive market place, driving innovative products and services at competitive prices.


For media enquiries, please contact:
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Competition Bureau
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www.competitionbureau.gc.ca
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