Wednesday, September 9, 2009
The Telegraph is reporting that a number of major airlines, including British Airways, Air France-KLM, and Qantas, are facing more than £1bn in fines and compensation claims for price-fixing on both cargo and passenger flights. See Helia Ebrahimi, Airlines Face Fines After EU Ruling on Price-Fixing, Telegraph (London), Sept. 5, 2009 (available here).
According to the story the ruling will be accompanied by a new directive from the European Commission which will help facilitate potential victims of price-fixing cartels coming together in "class action" type litigation. The heavy-handed enforcement and new legislation is intended to correct the perceived problem that the penalities for cartel behavior don't outweigh the benefit. As the story notes, many airlines build price-fixing fines into their annual budgets while allegedly reaping whirlwind profits from the behavior.