On 28 March 2014, the Australian Competition and Consumer Commission (“ACCC”) announced that travel agent, Flight Centre had been ordered by the Autralian Federal Court to pay fines totaling AU$11 million for “repeatedly attempting [between 2005 and 2009] to enter into anti-competitive arrangements with three international airlines to eliminate differences in international air fares offered to customers.”

The judgment dated 28 March 2014 of Logan J, sitting in the Federal Court in Brisbane, names the three airlines as Singapore Airlines, Emirates and Malaysian Airlines. With regard to all three, Flight Centre “attempted to induce, including by threats to withdraw the provision of distribution and booking services” an agreement by which the three airlines would be forced to:

 (i)                  make all their fares for international passenger air travel available for sale by Flight Centre

(ii)                pay to Flight Centre a retail or distribution margin on all sales of international passenger air travel

(iii)               sell international passenger air travel directly to the public at a price not less than the net fare plus Flight Centre’s retail or distribution margin

 Logan J noted that during the period covered by the contraventions, Flight Centre had a  share of at least 20% of the market for the distribution and booking of international air travel from Australia. The judge added  that:

“[Flight Centre] was the principal distributor for each of the airlines in question. It was this market power which it deployed in each of the attempted inducements. The threats which were entailed carried all of the weight associated with that market power. They could not have been more deliberately made.”

He also described 2009 e-mails from Flight Centre Chief Executive Graham Turner, which were sent in reaction to the threat to the travel agent’s business of direct offers by the airlines to the public of international fares, as “the most blatant of all the charged attempts to induce.”

The ACCC welcomed the decision of the Federal Court. However, ACCC Chairman Rod Sims expressed disappointed that Logan J did not apply the maximum fine of 10% of the travel agent’s turnover, as the ACCC had recommended.

Foreign Ministry of Belarus has indicated that the extradition of Uralkali CEO Vladislav Baumgertner from Belarus to Russia is soon to be completed.

Uladzimir Makei, Belarusian Foreign Minister, is reported to have confirmed during a press conference in Moscow that he was “confident the problem will soon be solved completely in a lawful manner.”  He added that he was unable to give the precise date of the extradition, but that to his knowledge only a “few minor things are left to be done.”  Makei noted he had agreed with his Russian counterpart, Sergey Lavrov, that “private issues” would not have a negative impact on the co-operation between the two countries.  Mr Makei’s announcement comes after the Belarusian Prosecutor General, Alexander Konyuk, confirmed on 14^th November 2013 that there were no obstacles to the extradition, although he emphasised that Uralkali’s CEO faced similar charges in Moscow to the ones he faced in Minsk.

As mentioned in a previous blog on 17^th October 2013, Baumgertner is currently under house arrest in Minsk on charges of embezzlement and abuse of power.  His arrest in August 2013 came in the wake of Uralkali’s decision to withdraw from a cartel with Belarusian potash producer, Belaruskali, leading to a collapse in prices.  Together the two companies controlled approximately forty per cent of global potash exports.  Belarusian President Alexander Lukashenko made clear his strong opposition to the termination of co-operation between the two companies. Potash, a soil nutrient, provides twelve per cent of the state revenue of Belarus and ten per cent of its export income.

The US Justice Department announced on 12 September 2013 that a federal grand jury has returned an indictment against Shingo Okuda, an executive at G.S Electech Inc., for his role in a conspiracy to fix prices in the car manufacturing sector.

Okuda, a Japanese citizen, is accused of agreeing during meetings and discussions to fix prices and rig bids for speed sensor wire assemblies sold to Toyota between 2003 and 2010, in violation of the Sherman Act. The charges against Okuda are the latest in the Department of Justice’s ongoing investigation into the automotive sector and follow Panasonic’s guilty plea in July 2013. Okuda is the first to be charged in Kentucky, where Toyota has a large assembly plant.

G.S Electech, which manufactures, assembles and sells a variety of automotive electrical parts, was the first of 12 companies to plead guilty to charges in the investigation and was fined USD2.75 million for its part in the cartel in April 2012. The investigation has so far seen 12 companies and 15 executives plead guilty and has cost the auto industry more than USD874 million in fines and resulted in prison sentences of between a year and a day and two years. Substantial fines have also been imposed in parallel investigations in Europe, Australia, Korea, Japan and Canada. An investigation in China is expected to be opened in the coming months.

There is no sign that the probe is set to slow down, with Scott Hammond, the departing deputy assistant attorney general of the antitrust division’s criminal enforcement programme, saying that “holding individuals accountable for their actions is the surest way to deter executives from choosing to collude rather than compete for business.”