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Four foreign airlines settle antitrust case

June 27, 2008|From the Associated Press

WASHINGTON — Four international airlines have agreed to pay $504 million in fines to settle charges they conspired to fleece customers by driving up cargo shipping prices.

The Justice Department called the case one of the largest antitrust settlements in U.S. history.

Associate Atty. Gen. Kevin J. O'Connor called the scam an "international price-fixing cartel" that cost consumers hundreds of millions of dollars from 2001 to 2006. In some instances, fuel surcharges rose by 1,000%.

One of the four airlines -- Air France-KLM -- has agreed to pay $350 million of the settlement. The other carriers are Cathay Pacific Airways, Martinair and SAS Cargo Group.

Authorities said executives from each of the airlines met repeatedly in the United States, Europe and Asia to devise a price-fixing scheme that raised cargo rates, fuel surcharges and security costs for businesses and consumers. The cartel focused on goods shipped to and from the U.S., including electronics, clothing, produce and medicines, O'Connor said.

Thursday's announcement marked the latest in a series of cargo shipping settlements over the last two years. British Airways, Korean Air, Qantas and Japan Airlines filed similar agreements as part of the investigation. In all, airlines have agreed to pay $1.2 billion in fines -- what O'Connor called "the highest total amount of fines ever imposed in a criminal antitrust investigation."

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