India fines Japanese car transport companies for illegal cartel

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India is the latest country to fine car transport companies for forming cartels (file photo)

Posted on 24 January 2022 13:19 by

The Maritime Executive







Indian authorities have fined several of Japan‘s major car transport companies after finding the companies guilty of breaches of India’s competition law, which prohibits anti-competitive agreements, including cartels. The Competition Commission of India (CCI) has imposed a total fine of nearly $8.5 million, while detaining defamatory corporate executives for anti-competitive behavior and issuing a cease and desist order against the illegal cartel. Car transporters in the past have been found guilty of similar charges in other countries.


After reviewing all the evidence, the TCC issued its final order against Nippon Yusen Kabushiki Kaisha (NYK Line), Kawasaki Kisen Kaisha (K-Line), Mitsui OSK Lines and Nissan Motor Car Carrier Company for creating and operating an impacting cartel motor vehicle shipping services operated on multiple trade routes for original equipment manufacturers. The investigation found that NYK Line, K-Line, MOL and NMCC between 2009 and 2012 operated under a “rule of respect”, which regulators said involved avoiding competition between them and protecting the business of the historic carrier with the respective OEM.


The commission says the four car carriers “used multilateral and bilateral contacts, meetings, emails with each other to share commercially sensitive information.” They regularly exchanged information on freight rates. “They also aimed to preserve their market position and maintain or increase prices, including resisting price reduction demands from some OEMs.”


In addition to finding the four companies guilty of “contravention of the provisions of the Competition Act”, the TCC also held the employees of each of the companies responsible for the anti-competitive behavior. A total of 14 at NYK Line, 10 at K-Line, six at MOL and three at Nissan were found responsible for the actions of their respective companies.


Each of the companies filed requests with the ICC to obtain less severe sanctions. The highest fine was imposed on Nissan Motor Car Carrier Company and its employees, totaling approximately $3.84 million after being reduced by 30%. The fine imposed on K-Line and its employees is approximately $3.24 million, while MOL and its employees were fined approximately $1.35 million after a 50% reduction . After review, the ICC has decided to reduce the fine imposed on NYK and its employees by 100%. The companies have also been ordered to end all cartel action and not read agreements in the future.


This is not the first time car transport companies have been found guilty of cartel practices. In 2016, NYK pleaded guilty in Australia to criminal cartel acts also related to vehicle shipping. In the long-running Australian case, K-Line also pleaded guilty to criminal cartel conduct in 2018 and Wallenius Wilhelmsen in 2020. MOL was included in the Australian case which is also said to revolve around a “rule of similar respect.


The South Korean Fair Trade Commission also found in 2017 that several companies, including MOL, NYK, K-Line, Nissan Motor Car Carrier, Hoegh, Wilhelmsen and others, violated South Korean antitrust law for services. car transport. The FTC fined nine companies more than $37 million, but in this case MOL and Nissan Motor Car Carrier Co. were granted leniency and were not fined.





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