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A group of companies led by Philips of the Netherlands and Ericsson of Sweden are taking KLM, Martinair and Air France to court seeking damages of more than EURO400 million (NZD$737 million) due to allege price-fixing by the airlines, according to a Financial Times report.

The report said international competition watchdogs have been investigating a worldwide cartel, based around air freight traffic rates for the past four years.

Almost two dozen airlines including KLM, Air France and Martinair, have admitted involvement in illegal activities in countries such as South Korea, Australia, Canada and the US — going back to 2000 and faced substantial financial penalties as a result. Air France and KLM merged in 2004, but retain separate legal identities.

But the European Commission’s competition watchdog has yet to announce the result of its investigation. Its long-awaited decision is thought to have been delayed because of airlines haggling over their ability to pay significant fines in the current economic climate, but is now expected shortly, possibly next month, the report said.

The outcome of the Dutch lawsuit, which could take several years to emerge, will depend on a finding of illegal activity by Brussels. But advisers to the companies involved say that because some European Union countries impose a 10-year limit on the backdating of claims and the alleged activity goes back to 2000, they could not wait to file any longer.

They allege that Air France-KLM, rather than other European airlines caught up in the air freight issue, is being targeted partly because it agreed to pay EURO87 million to US “victims” of the cartel, but offered nothing to European ones and did not respond to a request for negotiations.

The claim is being organised by Claims Funding International, a litigation funding company, and handled by BarentsKrans, the Dutch law firm. CFI is paying all the costs of the claim and will take an undisclosed fee if damages are recovered. — Source: Financial Times


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