EU Probes Airline Price Fixing

In many countries 'price fixing' is illegal where firms agree to sell commodities at a common price or at a certain minimum price.

U.S. and European officials have raided airlines in US and Europe in an investigation of possible price-fixing of freight shipments by passenger and cargo airlines.

The European Union's executive arm and the U.S. Justice Department conducted searches of some leading passenger airlines' cargo operations in Europe and around the United States, and other airlines were asked for information related to the probe.

"The Commission has reason to believe that the companies concerned may have violated (a European Union) treaty, which prohibits practices such as price fixing," the European Commission said in a statement.

It is against the law in most countries for companies to collude to set prices or divide territory. It is standard practice for antitrust authorities in Europe, the United States and other countries to coordinate simultaneous raids on suspects in cartel cases.

Some of the world's biggest airlines including American Airlines, British Airways Plc, Air France KLM, Lufthansa and several others have been asked for information related to alleged cartel activity.

International cartels deprive the consumers of fair competition which is essential in a free market. Such price fixing which is considered a criminal offence can be prosecuted under antitrust laws of many countries. In a global economy, the long arm of the law has got to reach far and wide to keep the crooks at bay.