The Federal Court has issued an AUD$25 million fine in relation to a shipping cartel. It’s one of the largest fines ever recorded under the existing competition regime. It also marks the first successful prosecution under current criminal cartel laws.
According to the Australian Competition and Consumer Commission (ACCC), it’s the first time in 100 years that “a cartelist was convicted, sentenced and fined for a breach of the criminal law”.
The recipient is Nippon Yusen Kabushiki Kaisha (“NYK”), one of the world’s largest shipping conglomerates.
NYK admitted to striking deals with other carriers not to alter their market shares or try to win business from each other. The deals involved the importation of Nissan, Suzuki, Honda, Toyota and Mazda vehicles.
Cartel penalty is big. But it could have been bigger.
NYK’s fine is the second biggest in ACCC history. But remarkably, it could’ve been worse.
This is because the Court issued a 50 percent discount on the penalty in recognition of NYK’s guilty plea. It also took into account the conglomerate’s “past and future assistance and cooperation” with ACCC investigations.
Significantly, NYK’s cartel began back in 1997. Yet this operation only focused on conduct occurring between 2009 and 2012, since Australia’s current criminal cartel provisions (under Competition and Consumer Act, or “CCA”) didn’t exist until 2009.
ACCC lessons from the shipping cartel case
Over the past three years, the ACCC has devoted an expanding range of resources to investigating cartels.
ACCC Chairman Rod Sims said the penalty “sends a strong warning to the industry and the business community at large. The [Commonwealth Director of Public Prosecution] and ACCC can and will criminally prosecute cartel conduct.”
He also noted that the case highlighted how the authorities could exercise leniency in the face of early engagement and cooperation.
NYK has encountered several anti-cartel challenges worldwide.
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