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ACCC Fines Garuda Airlines $19M Over Price Fixing

Indonesian airways, Garuda, has fallen prey to the ACCC’s air cargo cartel fight, with the Federal Court imposing $19 million in fines over price fixing.

The news follows similar action against fourteen other airlines (e.g. Air New Zealand, Qantas, Singapore Airlines and Cathay Pacific) generating fines over $130 million.

“Price fixing is a serious matter because it unfairly reduces competition in the market for Australian businesses and consumers, and this international cartel is one of the worst examples we have seen,” asserts ACCC Chair Rod Sims.

The Federal Court has today reprimanded PT Garuda Indonesia Ltd (Garuda) for “colluding on fees and surcharges” for air freight services.

The ruling comes after the Federal Court dismissed the ACCC’s case against Air New Zealand and Garuda in 2014, prompting the consumer watchdog to appeal.

“We are pleased to finally have resolution of this matter, which confirms our view that it was an important matter for us to appeal,” adds Sims.

Garuda was found to have fixed the price of security and fuel surcharges, plus a custom fee from Indonesia between 2003 and 2006 – prompting $15 million in fines.

A further $4 million was ordered for the “imposition and level of insurance and fuel surcharges” from Hong Kong.

“We are committed to pursuing cartel conduct from both domestic and overseas operators, and think the total penalty ordered against all the airlines involved sends a strong deterrent message, particularly when it comes to international anti-competitive conduct,” remarks Mr Sims.

“The ACCC has recently entered more formal agreements with the FBI on cooperation and information sharing, and has strong links to other competition regulators worldwide, which mean our scope is much broader than Australian businesses.”

“Any business anywhere that enters an agreement that affects Australian businesses and consumers should clearly take note.”

Further information is available on the ACCC’s website here.

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