September 6, 2010
On September 2, 2010, the U.S. Department of Justice announced that Polar Air Cargo LLC had agreed to plead guilty to price-fixing on air cargo shipments and agreed to pay a USD $17.4 million criminal fine.
In making its announcement, the DOJ stated:
“According to a one-count felony charge filed today in U.S. District Court for the District of Columbia, Polar Air Cargo LLC’s co-conspirators engaged in a conspiracy to fix the cargo rates charged to certain customers for international air cargo shipments between the United States and Australia from at least as early as Jan. 1, 2000, and continuing until at least Feb. 14, 2006. Polar Air Cargo LLC, an American airline based in Long Beach, Calif., joined and participated in the conspiracy from at least as early as Jan. 1, 2000, until April 30, 2003. Under the plea agreement, which is subject to court approval, Polar Air Cargo LLC has agreed to cooperate with the department’s ongoing antitrust investigation.
Air cargo carriers transport a variety of cargo shipments, such as heavy equipment, perishable commodities and consumer goods, on scheduled international flights.
According to the charge, Polar Air Cargo LLC carried out the conspiracy by agreeing during meetings, conversations and communications on certain components of cargo rates for shipments between the United States and Australia and by levying cargo rates in accordance with the agreements reached. As a part of the conspiracy, Polar Air Cargo LLC monitored and enforced adherence to the agreed-upon rates.”
Polar Air was charged with price fixing in violation of the Sherman Act, under which the maximum fine is USD $10 million for corporations (where offences were committed before 2004). In Canada, as a result of recent amendments to the Competition Act, the maximum penalties for contravening the criminal conspiracy provisions under section 45 are a fine of up to CDN $25 million (per count), imprisonment for up to 14 years, or both (increased from the former $10 million and 5 years).
According to the DOJ, as a result of its investigation, 17 airlines have been charged in its ongoing price-fixing investigation in the air transportation industry, more than $1.6 billion in criminal fines have been imposed and four airline executives have been sentenced to imprisonment. Airlines that have pleaded guilty in this case include British Airways Plc, Korean Air Lines Co. Ltd., Qantas Airways Limited, Japan Airlines International Co. Ltd., Cathay Pacific Airways Limited and Air France, among others.
For more, see the DOJ’s news release: Polar Air Cargo LLC Agrees to Plead Guilty to Price Fixing on Air Cargo Shipments.
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