Government probes DHL, FedEx, UPS domestic units over price collusion: Report
The inquiry, initiated in October 2022 following a complaint by the Federation of Indian Publishers, alleges that these companies, along with Dubai's Aramex and certain domestic firms, were coordinating charges and controlling customer discounts.
Antitrust body Competition Commission of India (CCI) is investigating the domestic units of global delivery giants, including DHL, UPS, and FedEx, over allegations of collusion related to discounts and tariffs, reported news agency Reuters.
The inquiry, initiated in October 2022 following a complaint by the Federation of Indian Publishers, alleges that these companies, along with Dubai's Aramex and certain domestic firms, were coordinating charges and controlling customer discounts.
The complaint suggests that executives exchanged commercially sensitive information on courier and storage services at airports before jointly deciding on rates. If proven, such actions would violate Indian antitrust laws.
The news agency’s report, citing government sources, noted that the CCI has started reviewing hundreds of thousands of emails in recent weeks as part of its investigation into the fees charged for airport services.
The regulator's initial assessment led to a broader inquiry into potential cartelisation among the logistics companies. The companies involved include DHL, FedEx, UPS, and Aramex, along with unnamed domestic firms.
"Such conduct appears to emanate out of coordination or collusion," the CCI said in one document.
The alleged collusion, if confirmed, could lead to fines under Indian antitrust laws.
A finding of cartelisation could result in fines of up to three times the profit for each year the fees were fixed or 10 per cent of annual revenue for each year of violation, whichever is greater.
While FedEx denied the accusations, it stated that it is cooperating with the CCI and remains committed to legal compliance. DHL also asserted its commitment to legal compliance and cooperation with the investigation. UPS mentioned its cooperation with the watchdog but refrained from providing details on the ongoing investigation. Aramex and the Indian complainant have not commented yet.
This investigation comes amid a booming market for courier, express, and parcel delivery services in India, expected to grow at an annual rate of 17 per cent, reaching $18.3 billion by 2029, driven by the e-commerce boom.
Several companies involved in the probe, including DHL and FedEx, have recently announced significant investments and expansions in the Indian market. The CCI is expected to complete its investigation and release its findings in March.