Air France and KLM sign agreement with Cade in alleged air cargo cartel

On Wednesday (20/02/13), the Administrative Council for Economic Defense – Cade celebrated a Cease and Desist Agreement (“TCC” for its acronym in Portuguese) with airline companies Societé Air France and KLM (a Royal Dutch Aviation Company) and two individuals. In the agreement, the parties consent to terminate the practices investigated in the process against an alleged cartel in the air cargo market (Administrative Proceeding No. 08012.011027/2006-02).

Additionally, the involved parties confess involvement in the practices under investigation. The TCC also provides for the payment of a contribution of BRL 14 million (approximately US$ 7 million).

“Air France and KLM, which are now part of the same group, understood that it would be appropriate to confess the practice and make this contribution," said the reporting commissioner, Ricardo Machado Ruiz. According to him, the value was set based on the revenues of the companies and the extent of their participation in the alleged cartel.

The investigation began in 2006, based on a leniency agreement – which allows for the reduction or elimination of the penalty of the participant in a cartel that denounces the practice and presents evidence for the investigation. The proceeding involves other companies and investigates the fixing of price and date in the transfer of additional fuel charged in international air freight in Brazil. The alleged cartel will still be judged by the Cade’s Tribunal.

This is the first TCC signed within this investigation. Earlier, in 2010, a draft agreement presented by Aerolíneas Brasileiras SA was refused by the Cade’s Tribunal.

The amount of the cash contribution to be paid by the TCC signatories will be collected to the Brazilian Diffused Rights Fund (“FDD” for its acronym in Portuguese), which entrusts the collected money to public agencies and civil nonprofit projects that aim at the recovery of assets and diffuse rights.