Delivery firms are split over whether to accept or appeal against heavy fines totalling €672 million imposed today by French authorities for anti-competitive price-fixing over seven years up to 2010.
The country’s competition watchdog, the Autorité de la Concurrence, announced it was fining 20 parcel companies (and also the French forwarders association TLF) a total of €672 million for jointly agreeing annual price increases at ‘secret’ meetings between September 2004 and September 2010.
The heaviest fines were imposed on Geodis (€196m), La Poste subsidiaries Chronopost (€99m) and DPD France – formerly Exapaq (€45m), DHL Express France (€81m), TNT Express (€58.5m), GLS France (€55m), Dachser France (€33m), Alloin Holding (€32m), Gefco (€30m) and FedEx Express France (€17m).
The other companies involved, which had lower fines, were BMVirolle, Ciblex, Heppner, Lambert et Valette, XP France, Norbert Dentressangle, Normatrans, Schenker France, Transport H. Ducros and Ziegler France. The TLF was fined €30,000 for its role in the price-fixing.
The authority stressed that the fines were fair and proportionate, and had been significantly reduced for six French companies that were in financial difficulties.
Outlining the case, the authority said that seven rounds of annual price increases were agreed at the ‘secret discussions’ which involved exchanging and discussing commercially sensitive pricing information. These agreements were frequently accompanied by bilateral and multilateral communications between some of the companies.
“For example, during the commercial negotiations for 2006-07, most of the companies, which had initially planned a price increase of about 5%, raised their demands to a higher level, of about 7%, following the information exchange,” the competition watchdog stated in a detailed press release outlining the background to the case and its long investigation.
In addition, some of the companies had also agreed on increases for fuel surcharges between 2004 and 2006. For its part, the TLF “actively participated in the organisation of the illicit talks and in keeping them confidential”, it added.
The price-fixing had mostly harmed small businesses due to their lack of negotiating power compared to larger customers who were better placed to negotiate their own rates, the authority pointed out. The eight largest members of the ‘cartel’ had a combined 71% share of the French parcels market at the time of their actions, it noted.
The reactions of some of the leading companies involved were mixed. Geodis announced that it rejected the decision and would appeal against it to the Appeals Court in Paris. “Geodis implemented a robust compliance programme across the group several years ago that is designed to prevent any improper behaviour,” it added.
La Poste told CEP-Research in a statement that it noted the decision regarding Chronopost and Exapaq. “La Poste puts particular importance on competition rules and voluntarily decided to introduce a compliance programme with effect from 2011. This programme has been substantially strengthened and deepened as part of the current investigation. La Poste will study all the elements in this decision and reserves the option of taking any action that it judges useful.”
A DHL spokesman said: “We can confirm that we received the decision on fuel surcharge and price fixing issues from the French Cartel Office. Currently we are reviewing the decision in more detail, and therefore cannot comment any further at this stage.”
TNT Express said in a press release: “TNT has co-operated with the investigation since it started in 2010. During the third quarter of 2014, TNT entered into a settlement agreement with the FCA and booked a provision of €50 million in relation to this matter. TNT will review the merits of the decision.”
Britain’s Royal Mail, the parent company of GLS France, stated: “Royal Mail confirms its acceptance of the determination of the French competition authority (Autorité de la Concurrence) confirming that GLS France was in breach of antitrust laws in the period 2004 to 2010. By agreeing not to contest the allegations and provide compliance commitments, Royal Mail has benefited from a reduction in the French competition authority's fine to €55.1 million (£40.2 million). Royal Mail recognises the absolute need to comply with European and national competition law and the necessity to prevent infringements. It has implemented an enhanced compliance programme in GLS France in order to strengthen the culture of competition law compliance.”
A FedEx Express France spokeswoman told CEP-Research: “FedEx Express is currently analysing the decision of the French Competition Authority issued on December 15 and reserves the right to file an appeal. The facts of this case concern Tatex – now FedEx Express France – and relate to a period prior to March 2010. The company was acquired by FedEx in 2012.”
