Qantas Airways to Plead Guilty in 6-Year Price-Fixing Scam Case

Charges were filed in U.S. District Court against Qantas Airways Limited, an Australian-based company. They were charged with trying to eliminate international shipping prices on cargo bound between Australia and the United States, among other places. Qantas Airways Limited has agreed to plead guilty to the charges filed.

The conspiracy to edge out competitors went on for a little over 6 years, ending in February of this year. Qantas Airways was the largest cargo shipper for goods traveling between the U.S. to Australia during this time period. The company earned more than $600 million dollars on these cargo flights.

The shipping company was caught in several illegal price fixing activities. It was found that Qantas had participated in discussions with co-conspirators about the cargo rates to be charged on certain trans Pacific routes to and from the United States. During these discussions, agreements were made about what to charge for these shipments of cargo. Once that was settled, they then went on to discuss the enforcement of these fixed cargo shipping rates.

Other companies have already entered a guilty plea for fixing passenger and cargo shipment prices. Earlier this year, in August, 2 other companies ( British Airways Plc and Korean Air Lines Co. Ltd. ) plead guilty. They will each have to pay $300 million fines.

Qantas has agreed to cooperate in the ongoing investigation. It is being conducted by the Antitrust Division's National Criminal Enforcement Section and the Federal Bureau of Investigation.

According to Thomas O. Barnett, Assistant Attorney General in charge of the Department's Antitrust Division, "Qantas' guilty plea sends a clear message that those who engage in price fixing and other forms of illegal collusion will pay a heavy price for their crime." He goes on to say, "The shipment of consumer products by air transportation is critical to our global economy. Our investigation into this important industry will continue, and we will aggressively pursue those who engage in criminal conduct that harms American consumers."

Even though Qantas has agreed to pay a $61 million criminal fine for their illegal business practices, the fine could have been much higher. Under the Sherman Act, which is an anti-trust, anti-monopoly law, a company found guilty of these crimes could be charged $100 million in fines. That amount can even be doubled if the profits from the illegal activity are found to be greater than the maximum fine amount.

Sources

US Department of Justice

http://www.usdoj.gov/opa/pr/2007/November/07_at_943.html

Sherman Act

http://www.usdoj.gov/atr/foia/divisionmanual/ch2.htm#a1