[300312.EN.LOG] EU Fines K + N, Panalpina, 12 Others US$225 Million For Price Fixing

THE European Commission has fined 14 air forwarders US$225 million for price fixing with the largest fine - $71.5 million - going to Swiss logistics giant Kuehne + Nagel ($71.5 million) with fellow Swiss operator Panalpina having to pay $61.9 million penalty. Both are contemplating appeals.

UPS was also hit with a $13 million fine, but DHL Global Forwarding and Exel were exempt because they turned on the others and informed the EU's antitrust regulators.

The Wall Street Journal reported that the probe, started with EC office raids in October 2007, concerned price-fixing in four separate cartel infringements, including services from the UK to outside the European Economic Area to the United States, China and from southern mainland China and Hong Kong to European destinations.

"Companies should be aware that crossing the line and colluding on prices comes at a high price, as today's decision illustrates," said EU antitrust commissioner Joaquin Almunia. "These cartels affected individuals and companies shipping goods on important trade lanes."

In November 2011, Kuehne + Nagel made a plea bargain with US Justice Department prosecutors and agreed to pay a $9.8 million fine, reported American Shipper.

"We will carefully consider the decision of the EU Commission and its rationale," said KN chairman Karl Gernandt. "We are of the opinion that the commission has not correctly investigated the facts and the participation of Kuehne + Nagel and has drawn significantly incorrect factual and legal conclusions.

"In addition, Kuehne + Nagel's comprehensive cooperation throughout the investigation was not adequately acknowledged. That is why we take into consideration to appeal against the decision before the European courts," he said.

Panalpina felt the same and is considering an appeal too. "Panalpina will analyse the commission's decision given its right to appeal the decision to the European General Court," the company said. "The group has so far made no provision for the penalty of EUR46.5 million euros (US$61.9 million) as it was not in a position to predict the outcome of this proceeding and to assess its financial exposure. It is Panalpina's position, which is supported by independent economic evidence, that the infringements likely did not affect prices paid by Panalpina's customers."

Panalpina settled with the US prosecutors for $12 million.

"Panalpina also completed settlement negotiations with the New Zealand Commerce Commission and the agreed penalty was approved by the competent court," the company said. "Identical antitrust proceedings in Canada and Australia were dropped. Two antitrust proceedings are still ongoing in Switzerland and Brazil."


Source : HKSG.