23 Shipping Companies Fined $81 Million For Illegal Price Fixing
Antitrust regulator of Korea has reportedly stated on Tuesday that it will be imposing a 96.2 billion won-fine to 23 shippers (foreign and Korean included). The reason is collusion to determine freight rates for 15 years.
Since 2018, the Fair Trade Commission (FTC) has been receiving allegations that mention HMM, and 22 foreign and local shipping lines had colluded to fix freight rates for Southeast Asian sea routes.
Reportedly, 11 foreign shippers and 12 South Korean colluded. They fixed the shipping costs of container cargo activities, between Dec 2003 and Dec 2018, 120 times to hike freight rates and other related costs, per the regulator.
South Korean shippers have said that they are permitted to take collective measures on the freight rates as well as other contract terms and conditions pertaining to transportation per the maritime shipping act of the country. However, the regulator mentioned that it was an illegal move as some of the criteria mentioned by law were unmet.
To recognize legitimate collective actions per the shipping act, shipping lines need to report to the maritime minister in a month after this kind of collective behaviour. They must discuss the move with freight owners before formulating a report as well.
Korea Marine Transport will possibly be fined the highest at 29.6 billion won and HMM is expected to be fined 3.6 billion won.
About 11 foreign shippers are expected to be fine. Of them, three are from Singapore, and four shipping companies each are from Taiwan and Hong Kong. Singapore’s Sealand Maersk Asia Pte Ltd. may face a fine of 2.37 billion won.
But the fine was significantly far smaller than what was expected as the regulator has chosen not to impose any fine for collusion on import channels as there was only limited impact.
The FTC had let the shippers know in May, via a review report, that it could be imposing up to 800 billion won as fines for violating the fair trade act, better known as the FTA.