Final boarding call: CJEU brings the Air Freight cartel proceedings to a close

On 26 February 2026, the Court of Justice of the EU (the CJEU) largely dismissed the appeals brought by 13 airlines in the long-running Air Freight cartel saga against a series of 2022 rulings by the General Court.

The appeals stemmed from a 2017 European Commission decision, which fined 19 airlines a total of €776m for participating in a cartel relating to air freight services - the second time fines were imposed on those airlines, after the Commission’s original 2010 infringement decision was set aside following an earlier set of appeals.

In this latest series of judgments, the CJEU largely upheld the General Court rulings that dismissed most of the airlines’ appeals against the 2017 decision (SAS Cargo succeeded in having its fine reduced, due to the General Court having incorrectly included certain revenues in its fining calculations). 

These Air Freight judgments mark the final chapter in one of the longest-running series of cartel investigations and appeals¹. They also address several important legal issues, including the Commission’s ability to sanction extraterritorial conduct, and the extent to which Government conduct can provide a defence to companies accused of violating EU competition law (the so-called “state coercion” defence). 

Background 

The cartel lasted from December 1999 to February 2026 and centred on three pricing elements in the air freight sector: a fuel surcharge introduced to address rising fuel costs; a security surcharge brought in after the terrorist attacks of 11 September 2001; and an agreement among carriers not to pay commission on surcharges to freight forwarders. The conduct spanned various routes, including intra-EEA routes and routes between third countries and EU/EEA member states.

The original investigation was triggered by a leniency application in December 2005, which was followed by dawn raids in February 2006. The Commission’s original decision of 9 November 2010 was addressed to 21 carriers and was appealed by various addressees to the General Court, which annulled the decision as against the appellants for defective reasoning. This was because the recitals, which described a single and continuous infringement (SCI) of Article 101 of the Treaty on the Functioning of the European Union (TFEU) covering all routes, in which all airlines participated², contradicted the operative part of the decision, which identified four separate infringements, with only some airlines participating in all four.

Following the original appeal process, the Commission adopted a fresh decision in 2017 and re-imposed fines on the appellants. It maintained that the appellants had participated in an SCI and it aligned the underlying reasoning in the recitals with the operative part of the decision, concluding that the airlines had coordinated on all three pricing elements in pursuit of one anticompetitive aim: distorting competition in the air freight sector within the EEA. 

The airlines appealed again. In March 2022, the General Court delivered a mixed outcome: it upheld the decision against seven of the 13 appellants, but partially annulled it for the remaining six – in some cases for failure to prove participation in all three pricing elements of the cartel, in others because the limitation periods had expired. Total fines were reduced by around €45m. The airlines then appealed to the CJEU. The grounds of appeal covered a mix of substantive and procedural points; below we focus on some of the key grounds and the CJEU’s assessment of them.

The central issues on appeal 

Jurisdiction: the qualified effects test

Several airlines challenged the basis on which the General Court confirmed the Commission's jurisdiction to sanction conduct taking place outside the EU – in this case, on the routes from third countries to the EU/EEA. 

The scope of the Commission’s extraterritorial powers was last considered in Intel, in which the CJEU identified two relevant tests that can be used to establish jurisdiction: (i) a test based on the place in which anticompetitive practices are implemented (the implementation test); and (ii) a test based on whether an immediate and substantial effect from those practices in the EU is foreseeable (the qualified effects test). 

The function of the qualified effects test

In Air Freight, several airlines sought to challenge the principle that the qualified effects test may, on its own, establish a basis for the Commission’s jurisdiction. The airlines argued that the qualified effects test serves to determine whether the application of Article 101 TFEU is compatible with public international law, but not to establish the Commission’s jurisdiction under EU law. According to the airlines, the implementation test must also be met, and this had not been made out in this case because almost all sales of inbound freight services were made outside the EEA.

However, the CJEU squarely rejected this argument, re-affirming that the implementation and qualified effects tests were alternatives and that the qualified effect test, if met, was therefore sufficient to establish the Commission’s jurisdiction. 

Application of the qualified effects test 

The airlines also argued that the qualified effects test was not met, and that the General Court had wrongly exempted the Commission from the obligation of assessing the effect of the conduct for the purpose of applying that test. 

The CJEU rejected these arguments as being based on a misreading of the General Court’s rulings. It also confirmed that for the qualified effects test to be met, the conduct in question must have a foreseeable, immediate, and substantial effect in the EU/EEA. In this case, the Commission had found that it was foreseeable that the conduct would produce substantial and immediate effects in the EU, including because the higher costs of air transport to the EEA, and the foreseeable effect of increasing the prices of imported goods, were by their very nature liable to have effects on consumers in the EEA. The CJEU accepted this line of reasoning. It also held that the Commission is not required to establish the existence of actual effects – it need only consider the “probable” effects of the conduct when applying the “foreseeability” threshold. In short, for the qualified effects test to be met, it is enough that the conduct is “liable” to have an immediate and substantial effect in the EU/EEA.

Critically, the CJEU drew a sharp distinction between jurisdictional and substantive questions. It confirmed in essence that the function of the qualified effects test is to serve as a basis for establishing the Commission's extraterritorial jurisdiction. It is, as such, entirely separate from the question of whether the conduct at issue had the object or effect of restricting competition under Article 101 TFEU. The standard of proof that applies to the analysis of effects under the qualified effects test is therefore not the same as that required to demonstrate anticompetitive effects. It is a more simplistic and lower standard of proof. This was particularly relevant in the present case, as the Commission had found only a “by object” infringement.

The “state coercion” defence

The CJEU also considered the state coercion defence, under which otherwise anticompetitive conduct will not infringe Article 101/102 TFEU where it is mandated by national legislation.

In the appeals against the 2017 decision, only SAS Cargo was partially successful in raising the defence before the General Court, in relation to routes from Thailand (on the basis that the rate of the infringing surcharge had actually been set by the Thai Department of Aviation). The General Court’s rejection of the application of the defence to routes from other jurisdictions (e.g. Hong Kong, Japan, India, and Singapore) was appealed to the CJEU, where SAS Cargo argued that the state coercion defence, where the relevant state is a third country, is not only available where the conduct is required by national legislation, but also where the conduct is regulated and/or encouraged by that third country. 

The CJEU, agreeing with the General Court, rejected this argument and confirmed that the defence does not apply where national legislation leaves open the possibility that harm to competition could be avoided through the autonomous conduct of the relevant firms. In other words, where there is flexibility under the legislation to adopt conduct that will not harm competition, the state coercion defence will not be available. 

Limitation periods

The applicable limitation periods proved a successful ground of challenge against the 2017 decision for several airlines before the General Court, but the CJEU refused to allow airlines that did not previously raise this argument to piggy-back off the General Court’s findings.

Under EU law, the Commission must impose a fine within five years of the infringement ceasing, subject to interruption by investigative or procedural steps. Even with interruptions, a 10-year longstop applies. The limitation period is suspended during court proceedings – but, crucially, only for the specific applicant and only in respect of the matters before the court. 

The General Court had found that the Commission breached these time limits when it decided in the 2017 decision to penalise conduct involving Cathay Pacific, LATAM Airlines and Japan Airlines on intra-EEA and EU-Switzerland routes, as well as conduct involving LATAM Airlines on certain EEA-third country routes. In each case, the reasoning was the same: the airlines’ appeals against the 2010 infringement decision had not suspended the time limits, because the relevant conduct was not covered by that decision.

Air Canada and Singapore Airlines had not raised the limitation argument before the General Court in their appeal against the 2017 decision, but argued the General Court should have applied it of its own motion. The CJEU disagreed: it found that the time limits in question constituted limitation periods and that, in line with settled case law, compliance with such periods must be raised by the party affected – it cannot be raised by the court of its own motion. The EU law principle of equal treatment (which prohibits differing treatment of comparable situations) did not assist either, since the airlines could have raised the argument themselves but chose not to.

Key takeaways 

The Air Freight judgments have several practical implications for parties accused by the Commission of having participated in international cartels:

• Extraterritorial jurisdiction has a low threshold: the CJEU has re-affirmed the qualified effects test as a standalone basis for asserting jurisdiction over conduct taking place outside the EU or EEA, and has formulated a standard – “probable” effects, and conduct “liable” to produce immediate effects – that sets a relatively low bar.
• State coercion is a narrow defence: third-country regulatory regimes will rarely provide a complete defence unless they truly eliminate any possibility of competitive behaviour. Mere encouragement or authorisation of coordination may only serve as a mitigating factor to reduce fines.
• Limitation periods must be actively raised: limitation periods are not a matter the EU courts will consider of their own motion. Parties that fail to plead the point cannot rely on equal treatment to benefit from the successes of other appellants. 

Trainee solicitor Jessica Barratt contributed to this article.