Justice Department Investigates UPS and FedEx
Jan 7th 2011 6:30PM
Updated Jan 7th 2011 8:10PM
The U.S. government is investigating the country's two largest shipping companies, UPS (UPS) and FedEx (FDX), over their policies aimed at preventing customers from using third-party consultants to negotiate lower shipping rates.
UPS (UPS) is being investigated by the U.S. Justice Department, while FedEx (FDX) is the subject of a similar probe by the Justice Department's antitrust division, CNBC reported.
The probe follows a lawsuit that AFMS, a third-party vendor, filed against the companies. UPS and FedEx customers saved more than $100 million on shipping fees between 2007 and 2009 by using such consultants, according to the lawsuit.
UPS spokeswoman Susan Rosenberg says the company has filed a motion to dismiss the claim. She also confirmed the federal investigation, saying the Justice Department has requested "information about UPS' policies and our right to decline to deal with third-party negotiators." She added that she didn't know how long the DOJ planned to investigate UPS.
A Justice Department spokeswoman declined to comment on the investigation, and FedEx also didn't respond to a request for comment from DailyFinance.
Both companies last year appeared to benefit from a rebound in consumer and business spending. FedEx's net income for the six months ended Nov. 30 surged 26% to $663 million as revenue rose 15% to $19.1 billion. UPS's profit for the nine months ended Sept. 30 jumped 70% to $2.37 billion as revenue rose 9.7% to $36.1 billion.