CCI launches antitrust probe into DHL, FedEx, UPS over alleged price collusion

Global delivery giants under CCI lens: The Competition Commission of India (CCI) is investigating global delivery giants, including Germany's DHL, United States-based United Parcel Service (UPS), and FedEx, over allegations of antitrust practices and collusion on discounts and tariffs, news agency Reuters reported quoting sources. This probe comes as the latest in a series of scrutinies faced by the logistics industry, with roots tracing back to 2015, when France imposed fines totaling $735 million on companies, including FedEx and DHL, for clandestine collusion to inflate prices.

The CCI has initiated a thorough examination, reviewing extensive email correspondence as part of its investigation into the fees levied by these companies for airport services. The inquiry, sparked by a complaint from the Federation of Indian Publishers in October 2022, alleges that DHL, FedEx, UPS, Dubai's Aramex, and some domestic firms jointly determined charges and controlled customer discounts, potentially violating Indian antitrust laws.

The complainant asserts that executives exchanged commercially sensitive information related to volumes, charges, and discounts on courier and storage services offered at airports. The CCI's initial assessment suggested that these companies "appear to be sharing commercially sensitive information amongst themselves ... for taking joint or collective decisions to arrive at tariffs."

FedEx has explicitly denied the accusations while expressing cooperation with the CCI and reiterating its commitment to legal compliance. DHL also stated its full cooperation and commitment to legal adherence, while UPS refrained from providing specific details on an ongoing, non-public investigation but affirmed its cooperation with the watchdog.

If proven, such collusion could result in fines up to three times the profit for each year the fee was fixed or 10 per cent of annual revenue for each year of violation, whichever is greater. The investigation is ongoing, with the watchdog seeking additional time until March to thoroughly analyse the evidence.

The logistics industry, driven by the e-commerce boom, anticipates robust growth, with courier and parcel delivery services expected to reach $18.3 billion by 2029. Companies like DHL, which announced a $547 million investment for expansion in India in 2022, and FedEx, which recently invested $100 million in a technology and digital innovation center, are positioning themselves to capitalise on this growth.

As the investigation unfolds, the industry awaits the findings of the Competition Commission of India, with potential consequences reverberating through the competitive landscape.

(With Reuters inputs.)