SAO PAULO--Brazil's leading airlines Gol Linhas Aereas Inteligentes SA (GOL, GOLL4.BR) and Tam, were each fined 3.5 million Brazilian reais ($1.75 million) for "irregularities" in selling travelers insurance to flyers, the country's Justice Ministry said Friday.

Tam, which last year merged with Chile's Lan to form Latam Airlines Group SA (LFL, LAN.SN), and Gol were being investigated for automatically including travelers insurance in the ticket price, the ministry said. While travelers could opt out of buying the insurance, "customers were induced into buying travelers insurance," constituting product bundling, which is illegal in Brazil, the ministry said.

The collected fines will be deposited in a ministry fund that investigates possible violations of environmental and consumer-defense rules.

Tam and Gol didn't immediately reply to a phone call and email seeking comment.

Write to Paulo Winterstein at paulo.winterstein@dowjones.com

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