Korean Air contests ACCC’s right to papers
An article in the Sydney Morning Herald says that Korean Air has initiated legal action to attempt to block the Australian Competition and Consumer Commission from obtaining sensitive documents in relation to the watchdog’s investigations into alleged price-fixing by international airlines.
A week after Qantas paid a $61 million fine to US authorities after pleading guilty to criminal charges that it illegally inflated air-cargo prices, Korean Air has exposed – possibly inadvertently – that the commission’s inquiry is well advanced.
The action comes as the two-year investigation by US and European authorities gathers steam, with an estimated 30 or so airlines subject to one of the world’s biggest anti-cartel investigations and, potentially, one of the largest ever class actions.
Korean Air has argued in the Federal Court that the local competition watchdog could not force it to hand over confidential documents or raid its offices.
In an application to the court, the airline said it was given a notice by the commission on October 31 demanding it hand over information by December 3.
Korean Air argued it did not have to hand over any documents because the commission had already started proceedings to prosecute the airline for breaching competition law.
Korean Air’s law firm, Clayton Utz, declined to comment on the action, which is not scheduled to go back to court until February.
The airline has already admitted to illegally rigging air fares and cargo rates on its services from Korea to the US.
In August, Korean Air paid a $US300 million ($344 million) criminal fine when it entered into a plea deal with US Government. The plea agreement said the airline had “participated in a conspiracy with one or more providers of air-cargo services, a primary purpose of which was to suppress and eliminate competition by fixing one or more components of the cargo rates charged to customers”.
The airline also confessed to fixing passenger fares with another unnamed trans-Pacific carrier. It is now subject to a class action in the US for the scam.
Qantas, British Airways, Lufthansa and Virgin Atlantic have already owned up to US authorities.
The exposure of the commission’s investigations into Korean Air are sure to spark speculation that the competition regulator has several large airlines in its sights.
It is likely to fuel interest in the $200 million class action, led by the law firm Blackburn Cashman, which is seeking damages over the alleged price fixing of air freight by Qantas, Singapore Airlines, Lufthansa, Air New Zealand, BA, Japan Airlines and Cathay Pacific.
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