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LATAM pleads guilty to price-fixing conspiracy

By Hpanchal on August 22, 2013

LATAM Airlines Group pleaded guilty to criminal conspiracy, according to the Canadian Competition Bureau.

LATAM was fined CA$975,000 (US$928,837) by the Ontario Superior Court of Justice for its participation in an air cargo price-fixing cartel.

LATAM’s guilty plea relates to fuel surcharges that it imposed on international air cargo shipments from Canada to South America and elsewhere between March 17, 2003 and Feb. 14, 2006.

The bureau’s investigation into the fixing of fuel and other surcharges has secured more than CA$25 million (US$23.8 million) in fines to date.

LATAM is the ninth party to be convicted in this investigation. Air France, KLM, Martinair, Qantas, British Airways, Cargolux, Korean Air and Cathay Pacific have also pleaded guilty to fixing one or more air cargo surcharges for shipments on certain routes to and from Canada.

The bureau’s investigation into the alleged conduct of other air cargo carriers continues.

Price-fixing conspiracies are difficult to detect and prove, the bureau said. High or identical prices are not in and of themselves evidence of criminal activity. There must be evidence that competitors have agreed to set those prices.

Under the Competition Act, which LATAM pleaded guilty under, it is a criminal offense for two or more competitors or potential competitors to conspire, agree or arrange to fix prices, allocate customers or markets, or restrict the output of a product.