The allegations are thought to be linked to the resignation of commercial director Martin George and communications chief Iain Burns. Although BA said fuel surcharges were "a legitimate way of recovering costs", in May 2007 it put aside £350 million for legal fees and fines.
On 18 April 2007 The European commission imposed a fined Heineken €219.3m , Grolsch €31.65m and Bavaria €22.85m for operating a price fixing cartel in Holland, totalling €273.7m. InBev, (formerly Interbrew), escaped without a penalty because it provided "decisive information" about the cartel which operated between 1996 and 1999 and others in the EU market. The brewers controlled 95% of the Dutch market, with Heineken claiming a half and the three others 15% each.
Neelie Kroes said she was "very disappointed" that the collusion took place at the very highest (boardroom) level. She added, Heineken, Grolsch, Bavaria and InBev tried to cover their tracks by using code names and abbreviations for secret meetings to carve up the market for beer sold to supermarkets, hotels, restaurants and cafes. The price fixing extended to cheaper own-brand labels and rebates for bars.
This is simply unacceptable: that major beer suppliers colluded to up prices and to carve up markets among themselves|||EU Competition Commissioner Neelie KroesIn December 2001 Interbrew, Danone (former owner of Kronenbourg), and two other smaller brewers were fined €91m for operating a cartel in Belgium while four Luxembourg companies were fined €448,000 the same month.
In 2004 Heineken and Kronenbourg, the two dominant brewers in France, were fined €2.5m - with the penalty reduced for co-operating. A similar inquiry into an alleged Italian cartel was closed without proceedings while the British and German beer markets were specifically excluded.
In January 2007 Siemens fined €396 million over its role in a collusion scandal. The European Commission has handed out a massive €750 million in fines to Siemens, Alstrom, Areva, Schneider and Japanese firms Fuji, Hitachi, Mitsubishi Electric, Toshiba and Japan AE Systems. Switzerland's ABB was a whistleblower and escaped without any fine from the Commission. Regulators found that the companies rigged bids for contracts and fixed prices in the market for gas-insulated switchgear - equipment is used to control the flow of energy in electricity grids. Its fine was the biggest of the companies involved because it was a ringleader, the Commission said. About 30 business premises and private homes were searched as part of the investigation.
The cartel swapped information on offers from customers and operated a quota system for the division of work. Bids were rigged so that tenders went to whichever firm was due work under the quota system. "Code names were used for both companies and individuals. They relied on anonymous email addresses for communication and used encryption for sending messages,” said the Commission.
The commission has put an end to a cartel which has cheated public utility companies and consumers for more than 16 years|||EU Competition Commissioner Neelie Kroes
All the major UK store chains, with the exception of Waitrose and Marks & Spencer, are embroiled in the OFT inquiry into milk prices in 2002 and 2003 which has been ongoing since the beginning of 2004. It was accepted by Asda, Sainsbury and Safeway, that stores increased the price of milk as a result of collusion. Dairy Crest and Wiseman allegedly acted as middle men, passing on sensitive information about prices to their supposed rivals. Britain's biggest store chain Tesco, and Morrison, are accused of collusion too, but vigorously deny they took part in the swindle. The allegations against Tesco involve cheese as well as milk and butter.
If the OFT proves its case, the retailers could theoretically face fines of up to 10 per cent of their worldwide turnover, which in Tesco's case would amount to £4.3bn. The Office of Fair Trading told Sainsbury's, Asda, Safeway, Dairy Crest, Wiseman and The Cheese Company they faced maximum fines of £116m, though the final figure may be as low as £80m as a result of their co-operation. Sainsbury's told the London Stock Exchange that its fine was £26m. The fine for Safeway is thought to be between £8m and £10m; £9m for Dairy Crest and £6m for Robert Wiseman. It is unclear who blew the whistle on the price-fixing but Arla, the dairy processor, will escape a fine after fully co-operating with authorities. Which? complained that, despite overpaying £270m, consumers would not receive any refunds.
In April 2008, The Office of Fair Trading named 112 companies that it says colluded to inflate the cost of a wide range of contracts worth billions of pounds, including tenders for schools, universities and hospitals.
The list includes several publicly listed companies, including Balfour Beatty, Kier Group and Carillion, with 80 of the firms have already admitted participating in some form of bid-rigging, or have applied for leniency in return for assisting the OFT. The allegations centre around "cover pricing", in which firms secretly agreed the prices they would submit during a tender process. A firm that did not want to win the contract would submit a price that was much too high. In some cases, the eventual successful bidder would then reward them with a secret payment. This bid rigging often involved false invoices. The OFT declined to comment on the value of the fraud.
ABN's then joint head of the UK equity trading desk, Michael Ackers, has been fined £70,000 for "market misconduct." The FSA decided that traders in ABN Amro Equities (UK), known as AAE, "accepted improper instructions whose apparent purpose was to push the closing market price of certain shares to a higher level than would otherwise have been the case". This happened on three separate occasions between April and October 1998 in respect of shares in Carlton Communications, British Biotech, Volkswagen and Metro. Angelo Iannone, the head of ABN's international sales trading desk in New York, had had a long-standing relationship with Oechsle and one of its fund managers, Andrew Parlin. They agreed to increase the price of the shares in question at the end of certain days' trading, to make the prices look better in clients' portfolios.
Trading in stocks simply to move the market price is a serious abuse: it distorts market forces and undermines investors' confidence in the integrity of the prices quoted on exchanges...These were not isolated events. The repeated nature of the breaches demonstrates the absence of a robust compliance environment on the firm's trading floor. We view with particular seriousness misconduct that occurs in the context of a firm's inadequate investment in compliance procedures, policies and training. Investors need to be confident that they are dealing in clean and orderly markets.|||Carol Sergeant, Managing Director of the FSA