AF-KL Willing to Pay High Compensation to DB for Price Manipulation

60 million euros – an awful lot of money! This sum Air France – KLM agreed to pay to Deutsche Bahn for settling recourse claims filed in 2014 by the railway company and its logistics arm DB Schenker against the Franco-Dutch freight carrier for continued price collusion. So far, it is the highest sum paid by any member of a former price fixing cartel to DB, including All Nippon Airways, Cargolux, SAS, Lufthansa Cargo and some others.


The case is not without a certain irony. Between 2002 and 2007, Deutsche Bahn and its logistics unit DB Schenker together with other prominent forwarding agents, among them CEVA and K+N, were themselves a member of a price fixing cartel. Consequently, in 2012, the EU Commission imposed fines totaling €169 million because of substantiated infractions. The defendants appealed against the EUC’s decision but the European Court of Justice rejected their claims in the second instance on 1 February this year, condemning DB Schenker / DB to pay €34,935,000 as compensation for continued price collusion.

Meanwhile, the culprit did not remain passive but filed suits against other potential perpetrators harming his business through imputed illegal activities. In total, DB and DB Schenker demand indemnification payments from eleven freight carriers amounting to €3 billion.
In the case of Air France-KLM evidently with success as seen by their willingness to reach an out-of-court settlement by transferring €60 million from their account to that of DB / DB Schenker. Prior to that, SAS, Cargolux, ANA, Qantas, and Singapore Airlines had reached similar but less costly arrangements, this way getting the DB demands off their books.
Two another candidates standing on DB’s lawsuit list, but unwilling to pay, are Lufthansa Cargo and their group member Swiss Air Lines. Their point: as former members of a price fixing cartel existing between 1999 and 2006, they offered the U.S. justice to cooperate under the terms of the leniency notice to shed more light on the price collusion. Accordingly, the U.S. prosecutors penalized them very modestly.

Civil lawsuit hangs like a Damocles sword over the heads of LH and Swiss
Since both airlines brought the price fixing activities to light, while supporting the investigations of the authorities, the EU Commission refrained from imposing any fines on LH or Swiss.
However, if this absolution by Brussels will help them to be spared from criminal justice remains to be seen. Because similar to the actions taken against the cartel members by public authorities the injured parties, among them DB/DB Schenker, Kuehne + Nagel, car maker BMW and some others have filed civil lawsuits. The outcome of these charges stands entirely open.

Heiner Siegmund

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