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Package Deal By FedEx And UPS?

Posted  February 9, 2011

According to media reports, the DOJ Antitrust Division is investigating accusations that UPS and FedEx colluded to freeze third-party shipping consultants out of the their shipping businesses.  The reports indicate that Justice has opened an investigation into possible collusion between FedEx and UPS, the two largest companies in the package shipping world. This investigation would come on the heels of a private antitrust action filed by a shipping consultant.

FedEx and UPS are said to each have complex shipping rates and rules, especially for international shipments.  Comparing their prices, against each other and against other competitors, is said to be difficult.  Some companies use third-party shipping consultants to help find the best shipping rates and to negotiate discounts.  One such consultant, AFSM, has sued FedEx and UPS, claiming collusion, refusal to deal, and group boycott.

The AFSM complaint, filed in the U.S. District Court for the Central District of California, alleges that FedEx and UPS publicly announced that they would no longer deal with shipping consultants, and that the two companies told their customers that their shipping rates would rise if they continued to use consultants.  We will monitor both the civil suit and the DOJ investigation for developments.

Tagged in: Antitrust Enforcement, Antitrust Litigation,