'K' Line fined US$23.4 million for conspiracy by Federal Court of Australia

JAPAN's ocean automotive carrier Kawasaki Kisen Kaisha ('K' Line) has been fined AUD34

04 August 2019 - 19:00
JAPAN's ocean automotive carrier Kawasaki Kisen Kaisha ('K' Line) has been fined AUD34.4 million (US$23.4 million) after it was convicted of being in a criminal cartel by the Federal Court of Australia.

The company reportedly would have been given an even bigger fine of AUD48 million, but the judge in the Federal Court of Australia showed leniency because of the company's early guilty plea and assistance. 'K' Line pleaded guilty last year to being involved in a global conspiracy with numerous other ocean shipping companies not to attempt to win business from each other and to fix ocean freight rates for shipping vehicles.

Under Australian competition antitrust law, it is unlawful to make an agreement that has the purpose or effect of directly or indirectly fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of the price in relation to services supplied by any or all of the parties to the agreement.

'K' Line supplies shipping services including roll-on roll-off (ro-ro) for cars, trucks, buses, commercial vehicles and agricultural and construction equipment.

'K' Line entered into a cartel with Mitsui OSK, Toyofuji Shipping, Nissan Motor Car Carrier and Wallenius Wilhelmsen Logistics. The cartel started at least as early as February 1997, but it ended in or about September 2012 after raids by the Japan Fair Trade Commission and the US Department of Justice on the offices of several shipping companies.

Specifically, the cartel members would share actual and proposed freight rates with each other. They also would agree to freight rates and changes to freight rates. They would submit, or decline to submit, tenders or bids in line with the agreements they had made to fix, control or maintain prices and to maintain existing market shares, reports American shipper.

'K' Line ultimately pleaded guilty to several instances between July 2009 and September 2012 of price fixing on certain routes to Australia.

During the period, 'K' Line's global share of capacity for ro-ro services was between 11.6 and 11.9 per cent. Mitsui had between 12.1 and 14.1 per cent. NYK had between 15.5 and 17.2 per cent. Eukor had between 10.9 and 11.6 per cent and Wallenius Wilhelmsen had between 8.2 and 10.5 per cent. Other car carriers had lower shares.

It was found that employees at varying levels of 'K' Line were aware of the cartel agreement, including some board directors, senior managers and even junior employees.

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