BA raided in global price-fixing investigation

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British Airways headquarters in London and New York were raided yesterday as an investigation was launched into alleged price-fixing.

A global inquiry by watchdogs including the European Commission and the US Department of Justice (DoJ) indicates that BA and other airlines may be involved in a conspiracy to fix cargo costs. In the process, businesses are potentially overcharged billions of pounds each year in transport fees.

In its criminal investigation, the DoJ has issued a 30-page subpoeana against BA. Officials at the DoJ refused to discuss individual companies. A spokesman would only say: "Our anti-trust division is investigating the possibility of anti-competitive practices. We are co-ordinating with the EC and other foreign competition authorities."

Early-morning raids at BA's cargo offices at Heathrow and in Queens, New York, were carried out yesterday.

The European Commission confirmed the "unannounced inspections" but did not elaborate. The EC seemed taken aback when BA revealed that the DoJ was also involved, declining to discuss the American link.

A spokesman for the EC said: "The Commission has reason to believe that the companies concerned may have violated an EU treaty which prohibits practices such as price-fixing."

Operating as a cartel is classed as criminal activity in the US and can lead to lengthy convictions. The EU can impose fines of up to a tenth of annual turnover.

By last night, Air France, Lufthansa, KLM and Cargolux had all confirmed that they were "co-operating" with the authorities.

BA, the third-biggest carrier in Europe, would seem central to the inquiry. The company said it had received requests for information relating to "alleged cartel activity involving British Airways and a number of other airlines and cargo operators".

The EC suspects the airlines and cargo groups have violated Article 81, an EC treaty that prohibits price-fixing. BA said: "British Airways' policy is to conduct its business in full compliance with all the applicable competition laws."