Antitrust Probe Targets Global Delivery Giants in India Over Alleged Collusion

India’s antitrust body, the Competition Commission of India (CCI), is currently investigating the local units of global delivery giants, including Germany’s DHL, U.S.-based United Parcel Service (UPS), and FedEx, for suspected collusion on discounts and tariffs, according to documents viewed by Reuters. This scrutiny marks the latest investigation into the logistics industry, with some cases dating back to 2015 when France imposed fines of $735 million on companies, including FedEx and DHL, for covertly colluding to inflate prices.

In recent weeks, the CCI has initiated a thorough review of hundreds of thousands of emails related to fees charged for airport services, as revealed by government documents and insider sources. The inquiry, instigated in October 2022, was prompted by a complaint from the Federation of Indian Publishers alleging that DHL, FedEx, UPS, and Dubai’s Aramex, along with certain domestic firms, were collectively determining charges and controlling customer discounts.

The complaint suggested that executives from these companies exchanged commercially sensitive information regarding volumes, charges, and discounts on courier and storage services at airports, influencing the subsequent rate decisions. If proven, such actions would contravene Indian antitrust laws. The CCI, in its early assessment leading to the broader inquiry, remarked that the companies “appear to be sharing commercially sensitive information amongst themselves … for taking joint or collective decisions to arrive at tariffs.”

While the antitrust watchdog has not responded to Reuters’ request for comments, FedEx explicitly denied the accusations but expressed cooperation with the CCI, emphasizing its commitment to legal compliance. DHL also affirmed its full cooperation and commitment to legal compliance. UPS, acknowledging the ongoing investigation, stated its cooperation with the watchdog. Aramex and the Indian complainant did not provide responses to Reuters’ queries.

A finding of cartelization in the investigation 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. The ongoing boom in e-commerce, fueling increased demand for courier, express, and parcel delivery services, has made many companies optimistic about the market’s prospects, expected to grow 17% annually, reaching $18.3 billion by 2029, according to research firm Mordor Intelligence. Notably, DHL had announced a $547 million investment in 2022 to expand its warehousing and workforce in India, highlighting it as a priority market, while a FedEx unit recently invested $100 million to establish a technology and digital innovation center.