Competition Commission of India Investigates Global Delivery Giants for Alleged Antitrust Practices

Explore the CCI investigation into global delivery giants like DHL, FedEx, and UPS over alleged antitrust practices in India. Potential repercussions may reshape the logistics industry.

on Jan 10, 2024

Competition Commission of India Investigates Global Delivery Giants for Alleged Antitrust Practices | Frontlist

In a significant development, the Competition Commission of India (CCI) has initiated an investigation into the domestic units of global delivery companies, including Germany's DHL, United States-based United Parcel Service (UPS), and FedEx, over allegations of antitrust practices and collusion on discounts and tariffs. The inquiry, launched in October 2022 following a complaint by the Federation of Indian Publishers, suggests that these companies, along with Dubai's Aramex and certain domestic firms, were coordinating charges and controlling customer discounts.

The complaint alleges that executives exchanged commercially sensitive information related to volumes, charges, and discounts on courier and storage services at airports before jointly deciding on rates. If proven, such actions would violate Indian antitrust laws.

The CCI, in its initial assessment, stated, "Such conduct appears to emanate out of coordination or collusion." The regulator has now expanded its inquiry into potential cartelization among logistics companies, with companies such as DHL, FedEx, UPS, and Aramex under scrutiny, along with unnamed domestic firms.

The investigation delves into reviewing hundreds of thousands of emails, examining the fees charged for airport services by these companies. A finding of cartelization could lead to fines of up to three times the profit for each year the fees were fixed or 10% of annual revenue for each year of violation, whichever is greater.

While FedEx has vehemently denied the accusations, expressing cooperation with the CCI and reiterating its commitment to legal compliance, DHL has also asserted its commitment to legal compliance and cooperation with the ongoing investigation. UPS, though refraining from providing specific details on the investigation, confirmed its cooperation with the watchdog. Aramex and the Indian complainant have not commented on the matter.

This investigation comes at a time when the courier, express, and parcel delivery services market in India is witnessing significant growth, expected to reach $18.3 billion by 2029, driven by the ecommerce boom. Companies involved in the probe, such as DHL and FedEx, have recently announced substantial investments and expansions in the Indian market.

The CCI is expected to conclude its investigation and release its findings in March, with potential repercussions that could reshape the competitive landscape of the logistics industry in India. As the industry eagerly awaits the outcome, the CCI's probe underscores the importance of maintaining fair competition and adherence to antitrust laws in the rapidly evolving logistics sector.