In March 2006, the Competition Commission (Commission) initiated a complaint against Martinair Cargo, a division of Martinair Holland N.V (Martinair) and other airlines following the submission of a leniency application by Lufthansa Cargo AG under the Commission's Corporate Leniency Policy. The complaint related to alleged price fixing of fuel surcharges in the international market for the provision of air freight and/or cargo services, including such services into and from South Africa.
The Commission's investigation revealed that information exchanges between competitors, including Martinair, occurred on the subject of fuel surcharges, this being a component of the total price charged for the provision of cargo services. Put differently, in imposing fuel surcharge rates, the investigation indicated that Martinair did not act independently of its competitors. Accordingly, the Commission's investigation revealed that Martinair's conduct constituted a contravention of the Competition Act, No 89 of 1998 (Act).
Following the Commission's investigation, Martinair elected to settle the matter with the Commission, thereby entering into a settlement agreement, which was subsequently referred to the Tribunal to be confirmed as an order of the Competition Tribunal. The settlement agreement included an admission of having contravened the Competition Act as well as agreement to pay an administrative penalty of USD$ 533,517.38.
The settlement agreement also records Martinair's pre-existing competition law compliance programme, instituted in an effort to prevent further competition law violations. This recordal is a reminder to firms to pro-actively ensure that internal compliance programmes are put in place, as this may find favour with the authorities when considering sanctions to be imposed as a consequence of contraventions of the Competition Act.