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CADE reduces international air cargo cartel fines

Anticompetitive conduct

Companies and individuals were condemned in 2013 for the anticompetitive practice
published: Nov 26, 2014 10:00 AM last modified: May 03, 2016 03:52 PM

The Administrative Council for Economic Defense – CADE changed, on 26 November 2014, the amount of fines applied to ABSA Aerolíneas Brasileiras S.A., American Airlines Inc., Alitalia Linee Aeree Italiane S.P.A. and four individuals involved in the international air cargo cartel case. The companies and individuals were condemned by the agency in august 2013 for fixing prices and the date of implementation of a fuel surcharge in the international air cargo transportation in Brazil.

The Reporting Commissioner of the motions for clarification, Commissioner Ana Frazão, explained that there were contradictions in the vote issued by the reporting commissioner of the Administrative Proceeding no. 08012.011027/2006-02. These contradictions justified the exceptional reexamination of the amount and the changes in the fines’ percentages applied.

“The reexamination was done to compensate omissions and contradictions of the decision appealed. As it was, the decision compromised the internal coherence of the case. Therefore, the review assures the proportionality and fairness of the fixed fines under the law”, stated the Reporting Commissioner.

In regards to American Airlines, the Tribunal considered the percentage of the turnover used to calculate the fine to be much higher than the one imposed to the other charged parties and to the fines traditionally applied by CADE in cartel cases. For this reason, the amount applied to the company was changed to BRL 16.1 millions. To Dener José de Souza, former employee of the company, the fine was maintained.

ABSA had the fine reduced to BRL 32.7 million. The Tribunal understood that the method to sum the company’s turnover may have led to a distortion in the fine amount, which would harm the principle of equal treatment. With the new amount, the sanctions applied to the individuals that were part of ABSA’s board members at the time of the conduct were also reduced. Thus, the fines applied to Norberto Maria Jochmann, Hernan Arturo Merino and Javier Felipe Meyer de Pablo changed to BRL 654,000, BRL 327,000, and BRL 327,000, respectively.

As for Alitalia, the Tribunal verified that the company had a reduced participation in the cartel when compared to the other condemned companies. For this reason, the fine amount imposed to the company was reduced to BRL 1.7 million. Following the same understanding, the former employee, Margareth Faria, had her fine reduced to BRL 31,900.