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K-Line Convicted and Fined $24 Million for Past Cartel Activity

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By The Maritime Executive 2019-08-02 20:43:58

An Australian court has convicted K-Line of criminal cartel conduct and ordered it to pay a fine of $24 million, adding to the long string of convictions that certain ro/ro lines have accumulated in connection with an alleged price-fixing scheme dating from the late 1990s through 2012. 

The court found that K-Line engaged in a cartel with other shipping companies in order to fix prices on the transportation of cars, trucks, and buses to Australia between 2009 and 2012. K-Line already pleaded guilty to the charge.

According to the Australian Competition and Consumer Commission (ACCC), the cartel was in operation from as early as February 1997, and it affected the transportation prices of cars, trucks, and buses to Australia from the US, Asia and various European countries. K-Line and other shipping lines transported these vehicles on behalf of major car manufacturers such as Nissan, Suzuki, Honda, Toyota and Isuzu and others.

“We welcome the Court’s decision and the significant penalty imposed on K-Line,” ACCC Chair Rod Sims said. “Cartel conduct, such as that engaged in by K-line, not only cheats consumers and other businesses through inflated prices and costs, but also restricts healthy economic growth and discourages innovation. This decision is a serious warning to businesses and will deter others seeking to join or start a cartel."

K-Line’s fine of $24 million is the largest ever criminal fine imposed under Australia's Competition and Consumer Act, but it is less than what the court would have imposed if K-Line had not cooperated (and much less the maximum possible penalty of $68 million).

“Anti-competitive conduct will not be tolerated and will be dealt with harshly when it comes before this Court," ruled Justice Michael Wigney of the Federal Court of Australia. "The scope of the conduct was substantial and extensive. It occurred in a market for services that were and are of considerable economic importance to Australia."

Many of the most prominent shipping antitrust investigations in recent years have been in the ro/ro car carrier market. Since 2011, authorities in China, the United States, Brazil and Japan have investigated Eukor, Wallenius Wilhelmsen, MOL, K-Line, CSAV, Eastern Car Liner, NYK, Autotrans, World Logistics Service, Hoegh Autoliners, Toyofuji Shipping and Nissan Motor Car Carrier for alleged bid-rigging and price-fixing. Subsidiaries of K-Line, NYK, Wallenius Wilhelmsen and CSAV have pleaded guilty to related charges in a U.S. Justice Department investigation, and ten car carriers face a class action lawsuit from American shippers seeking to recover damages.