Australian Competition and Consumer Commission v Japan Airlines International Co Ltd

In the Federal Court of Australia, the Australian Competition and Consumer Commission (ACCC) brought an action against Japan Airlines International Co Ltd for breaching provisions of the Competition and Consumer Act 2010. The ACCC alleged that Japan Airlines had engaged in anti-competitive practices by entering into understandings with competitors regarding the imposition of fuel surcharges and the non-discounting of insurance and security surcharges on air cargo services. The ACCC claimed that these practices substantially lessened competition in the market for the carriage of air cargo from Singapore to various destinations including Australia.

The court was required to determine whether Japan Airlines had indeed contravened the Act by reaching the aforementioned understandings with competitors, and if so, whether these provisions had the effect of fixing, maintaining, or controlling prices for air cargo services. The court also needed to assess whether the practices substantially lessened competition within the meaning of the Act. If the allegations were substantiated, the court would then need to decide on the appropriate penalties and restraints to impose on Japan Airlines to prevent future breaches.

The court found that Japan Airlines had contravened sections 45(2)(a)(ii) and (b)(ii) of the Act by reaching understandings with competitors to impose and not discount certain surcharges on air cargo services. The court held that these understandings had the effect of fixing, maintaining, or controlling prices, thereby substantially lessening competition. As a result, the court imposed a pecuniary penalty of $5.5 million on Japan Airlines. Additionally, the court ordered that Japan Airlines be restrained for five years from entering into similar anti-competitive arrangements unless specific conditions were met, such as the arrangements not involving the carriage of goods to or from Australia, or being necessary for interlining purposes, or being authorised under the Act. Japan Airlines was also ordered to pay a contribution of $200,000 towards the ACCC's costs.