Antitrust Law Daily Wrap Up, ANTITRUST NEWS: DHL seeks recovery in air cargo services price fixing suit, (Oct 6, 2015)

By Greg Hammond, J.D.

British Airways PLC, through its cargo division, has once against been accused of conspiring with other airfreight shipping services companies to fix the prices of air cargo services, in a complaint filed by DPWN Holdings (USA), Inc. and its affiliated companies (DHL) in the federal district court in New York (DPWN Holdings USA, Inc. v. British Airways PLC, October 5, 2015).

British Airways previously pleaded guilty to U.S. Department of Justice allegations that the airline conspired to fix the prices of air-cargo rates from March 22, 2002, until February 14, 2006, the complaint alleges. In addition, a total of 20 airfreight carriers have pleaded guilty to felony antitrust violations and have paid nearly $1.75 billion in criminal fines to the Justice Department for their involvement in the cartel. A class of direct purchasers accepted an $89.5 million settlement from British Airways in May 2011.

DHL has now filed its own claims, alleging that—from at least February 1, 2000 through at least the third quarter of 2006—British Airways conspired with other airfreight carriers to fix, raise, maintain, and/or stabilize the prices for air cargo shipments, including fuel surcharges, security surcharges, and base-freight rates. Specifically, DHL claims that the airfreight carriers reached the illegal agreement through International Air Transport Association meetings, including agreements to: fix fuel surcharges; adhere to a modified fuel surcharge mechanism; refuse to discount fuel surcharges; refrain from offsetting surcharges by cutting base rates; impose new surcharges to recoup increased security-related costs; and increase base rates on certain routes.

In addition, DHL asserts that the airfreight carriers engaged in frequent communications to monitor adherence to the cartel and fraudulently concealed their unlawful conduct from DHL by participating in secret communications, giving false and pre-textual reasons for numerous surcharges, staggering their implementation of changes, and instructing recipients of emails concerning the cartel to keep them “strictly CONFIDENTIAL especially for anti-trust reasons” and to delete them.

The complaint sets forth a single claim for violation of Section 1 of the Sherman Act—that British Airways participated in a global Cartel that fixed the base-freight rates and surcharges that DHL paid for U.S. airfreight shipping services. DHL consequently seeks trebled damages; permanent injunctive relief that would prohibit British Airways from adopting or continuing any conspiracy or practice to have a similar purpose or effect of restraining competition; as well as attorney fees, costs, and pre- and post-judgment interest.

The case number is 1:15-cv-05751.

Attorneys: J. Peter Coll, Jr. (Orrick, Herrington & Sutcliffe LLP) for DPWN Holdings USA, Inc.

Companies: DPWN Holdings USA, Inc.; British Airways PLC

News: Antitrust