Competition Commission of India checking if DHL, FedEx, and UPS colluded on discounts and tariffs

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The Competition Commission of India (CCI) is currently looking through many emails as part of their investigation into the fees that companies have been charging for airport services.

India’s competition authority is looking into the activities of local branches of international delivery companies like DHL from Germany, United Parcel Service from the United States, and FedEx. The investigation focuses on whether these companies have worked together to restrict competition by agreeing on discounts and tariffs. This information comes from documents viewed by Reuters.

The logistics industry has faced multiple investigations, with some going back to 2015. In that year, France fined 20 companies, such as FedEx and DHL, a total of $735 million for secretly working together to raise prices.

The Competition Commission of India (CCI) is investigating the fees that companies charged for airport services. They are examining emails as evidence and getting information from government documents and three sources.

The inquiry started in October 2022 because the Federation of Indian Publishers said that DHL, FedEx, UPS, Dubai’s Aramex, and some Indian companies were deciding prices together and controlling customer discounts.

If proven, these actions break the antitrust laws in India.

The publisher stated that company executives shared important business details about the amount of services provided, the fees charged, and the discounts given for courier and storage services at airports. They did this before deciding on the prices.

They seem to be sharing important business information with each other and making decisions together about the prices they charge. The CCI said this during their initial evaluation, which resulted in a larger investigation.

The antitrust watchdog didn’t answer Reuters’ request for a comment.

FedEx released a statement denying the accusations in the complaint. They told Reuters that they are working with the CCI and are committed to following the law. DHL also stated that they are fully cooperating and always obeying the law.

UPS couldn’t provide details about an ongoing, private investigation, but they are cooperating with the watchdog.

Aramex and the Indian person who filed the complaint did not respond to Reuters’ questions.

Reuters was the first to report the investigation’s details. The watchdog keeps the details of price-fixing and cartel cases confidential.

If companies are found to have colluded, they could face a penalty of up to three times the profit they made each year the fee was fixed, or 10% of their annual revenue for each year they violated the rules.

The demand for courier, express, and parcel delivery services is expected to grow by 17% annually, reaching $18.3 billion by 2029, thanks to the rise in e-commerce. This optimistic outlook has led many companies to have a positive view of the market’s potential, according to research firm Mordor Intelligence.

In 2022, DHL announced its plan to invest $547 million in India, considering it a priority market. Recently, a FedEx unit established a technology and digital innovation center with a $100 million investment.

Most companies under investigation sent emails to the organization that oversees them in response to notifications. These notifications were sent after the organization identified important executives who were involved in the alleged misconduct. The documents obtained demonstrate this.

The investigators have asked for more time, until March, so they can carefully examine all the evidence before creating an internal report.

The 2022 review conducted by the overseeing organization revealed that courier companies decided on charges for services provided at airports during meetings. These charges later became compulsory for all participants in an agreement. The documents confirm this.

The group of complainants also claimed that certain companies imposed a fuel surcharge of 17% to 22% by citing high fuel prices. However, they did not reduce the surcharge even when the fuel prices decreased during the travel restrictions imposed due to the COVID-19 pandemic.

It seems like there is coordination or collusion involved, according to the CCI.

(The headline and picture in this report may have been changed by the staff, but the rest of the content comes from a syndicated feed.)

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