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FTC fines shippers for collusion

Eight companies will be investigated by Korean prosecutors
Aug 22,2017
Korea’s antitrust agency imposed a fine and referred a group of international car shipment companies to the local prosecutors’ office for collusion on Monday in the government’s first case against international collusion since President Moon Jae-in took office in May.

The Fair Trade Commission ordered 10 companies that ship cars to markets around the world to change their business practices. The commission fined nine of the companies a total 43 billion won ($38 million) and reported eight to Korean prosecutors.

The companies include one Korean company, EUKOR Car Carriers; five Japanese companies (Nippon Yusen Kaisha, Mitsui O.S.K, Kawasaki Kisen Kaisha, Nissan Motor Car Carrier and Eastern Car Liner); two Norwegian companies (Wallenius Wihelmsen Logistics and Hoegh Autoliners); a Chilean company, Compania Sud Americana de Vapores; and one Israeli company, ZIM Integrated Shipping Service.

One of the Norwegian companies, Hoegh, was exempt from the fine. The commission said it couldn’t confirm that Hoegh made any profit off the collusion. It was also excluded from the referral to prosecutors along with ZIM because the claim is based on accusations of unfair market distribution.

The Fair Trade Commission claimed the companies colluded for 10 years since August 2002, when top executives from each company agreed to respect each other’s cargo contracts and routes. Nine companies, excluding ZIM, were said to have helped each other retain their contracts with automakers including BMW, GM Korea, Renault Samsung Motors and Volvo by either sitting out bids or proposing a price so high that the manufacturer would opt to keep its contractor.

“By respecting their previous contracts and at the same time requesting that other companies respect their own contracts, a smear agreement was made on the different routes internationally,” said Ahn Byung-hoon, head of the Fair Trade Commission’s international cartel department.

ZIM and Nissan Motor Car Carrier were also found to have fixed prices. Between March 2008 and August 2011, they colluded on shipping charges to deliver Hyundai Motor vehicles to Israel, the commission said.

The two companies are the only ones delivering Hyundai cars to the Middle Eastern country, according to the Fair Trade Commission.

Along with EUKOR Car Carriers, ZIM and Nissan Motor Car Carrier were commissioned by Hyundai to be in charge of delivery and agreed to raise shipping fees to $100 per vehicle in 2008, and in the following year also fixed prices for delivering the YF Sonata and New Grandeur HG.


BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]