The Competition Commission of India (CCI) has penalized four maritime transport firms – Kawasaki Kisen Kaisha Ltd or K-Line, Nippon Yusen Kabushiki Kaisha or NYK Line, Nissan Motor Car Carrier Company or NMCC, and Mitsui OSK Lines or MOL for indulging in cartelization and violation of maritime motor vehicle transport services to automobile OEMs for different trade routes. Amongst these, NMCC, NYK Line, and MOL were lesser penalty applicants.
The examination of evidence showed that there was a clear deal between NYK Line, K-Line, MOL, and NMCC to enforce the “Respect Rule” that indicated avoiding any kind of competition with one another and securing the business of the incumbent carriers with respective OEMs.
To achieve the set objective, these maritime transports firms considered resorting to multilateral and bilateral meetings/e-mails/contacts with one another to share commercially sensitive information, for instance, freight rates. The companies aimed to maintain their position in the current market and increase or maintain prices, including by resisting demands for price reduction from specific OEMs.
Based on an assessment of pieces of evidence, the Commission held four parties, NYK Line, NMCC, K-Line, and MOL guilty of contravention of the provisions of Section III of the Competition Act, 2002 that prohibits any kind of anti-competitive agreements, such as cartels, from 2009–2012. Per Section 48 of the act, 14 personnel of NYK Line, 10 of K-Line, 6 of MOL, and 3 of NMCC, were held liable for the anti-competitive attitude of their organizations.
As three firms submitted lower applications for a penalty, the Commission provided the benefit of reduction in penalty by 50% to MOL and also to its individuals, 30% to NMCC and to its individuals, and 100% to NYK Line and its individuals. The Commission also directed K-Line, NMCC, and MOL to pay penalties of about Rs. 24.23 crore, Rs. 10.12 crore, and Rs. 28.69 crore respectively, besides also passing an order of cease-and-desist.