Nippon Airways Co. Pleads Guilty to Price Fixing on Air Cargo and Air Passenger Services

On November 1, 2010, the U.S. Department of Justice (DOJ) announced that All Nippon Airways Co. Ltd (Nippon), a Japan-based company, has agreed to pay a $73 million criminal fine for two separate conspiracies to fix prices in the air transportation industry.

According to a two-count felony charge, Nippon engaged in a conspiracy to fix one or more components of cargo rates charged for international air cargo shipments from April 2000 until February 2006. In addition, Nippon is charged with engaging in a conspiracy to fix unpublished passenger fares on tickets purchased in the U.S. from April 2000 until April 2004. 

DOJ alleges that Nippon carried out the conspiracies by agreeing during meetings and other communications on certain components of the cargo rates to be charged for shipments on routes between the U.S. and Japan, and on unpublished passenger fares to be charged on tickets purchased in the U.S. 

As part of the conspiracies, Nippon levied cargo rates and unpublished passenger fares in accordance with the agreements reached, and monitored and enforced adherence to the agreed-upon cargo rates and unpublished passenger fares.

Nippon is charged with two counts of price fixing in violation of the Sherman Act, which carries a maximum fine for corporations of $100 million for each violation committed after June 22, 2004, and $10 million for violations committed before that date. The maximum fine for each count may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

As a result of DOJ's investigation, a total of 19 airlines and 14 executives have been charged in the ongoing investigation into price fixing in the air transportation industry. To date, more than $1.6 billion in criminal fines have been obtained and four executives have been sentenced to serve prison time. 

Charges are pending against the remaining 10 executives. Under the plea agreement, which is still subject to court approval, Nippon has also agreed to cooperate with the DOJ's ongoing antitrust investigation.