Australia: Garuda ordered to pay US$19M for price fixing

The Federal Court has ordered PT Garuda Indonesia Ltd (Garuda) to pay penalties of $19 million for colluding on fees and surcharges for air freight services.

The penalties follow the Australian Competition and Consumer Commission’s (ACCC) court action against a global air cargo cartel, which has so far resulted in penalties of US$132.5 million against 14 airlines, including Air New Zealand, Qantas, Singapore Airlines, and Cathay Pacific.

The Court found that between 2003 and 2006, Garuda made and gave effect to agreements that fixed the price of security and fuel surcharges, as well as a customs fee from Indonesia. It was ordered to pay $15 million.

A further $4 million was ordered for the imposition and level of insurance and fuel surcharges from Hong Kong.

“Price fixing is a serious matter because it unfairly reduces competition in the market for Australian businesses and consumers, and this international cartel is one of the worst examples we have seen,” ACCC Chair Rod Sims said.

“We are committed to pursuing cartel conduct from both domestic and overseas operators, and think the total penalty ordered against all the airlines involved sends a strong deterrent message, particularly when it comes to international anti-competitive conduct.”

“The ACCC has recently entered more formal agreements with the FBI on cooperation and information sharing, and has strong links to other competition regulators worldwide, which mean our scope is much broader than Australian businesses,” Mr Sims said.