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Thursday, 22 February 2018

Four Car Carriers Hit with USD 486 Mn Cartel Fine

The European Commission has fined four maritime car carriers EUR 395 million (USD 486.6 million) for taking part in cartels.

The European Commission said today that it had found that the Chilean maritime carrier CSAV, the Japanese carriers "K" Line, MOL and NYK, and the Norwegian/Swedish carrier WWL-EUKOR participated in a cartel concerning the intercontinental maritime transport of vehicles.

"All companies acknowledged their involvement in the cartels and agreed to settle the cases," the commission said.

The decision is related to an investigation launched back in September 2012, when EU Commission officials raided the premises of several providers of maritime transport services for cars and construction and agricultural rolling machinery.

The investigation has found that for almost 6 years, from October 2006 to September 2012, the five carriers formed a cartel in the market for deep sea transport of new cars, trucks and other large vehicles such as combine harvesters and tractors, on various routes between Europe and other continents, the commission added.

In addition, the investigation revealed that the carriers' sales managers met at each other's offices, in bars, restaurants or other social gatherings and were in contact over the phone on a regular basis.

"In particular, they coordinated prices, allocated customers and exchanged commercially sensitive information about elements of the price, such as charges and surcharges added to prices to offset currency or oil prices fluctuations," the commission said.

"The carriers agreed to maintain the status quo in the market and to respect each other's traditional business on certain routes or with certain customers, by quoting artificially high prices or not quoting at all in tenders issued by vehicle manufacturers."

The cartel is said to have affected both European car importers and final customers, as imported vehicles were sold within the European Economic Area (EEA), and European vehicle manufacturers, as their vehicles were exported outside the EEA.

In 2016, some 3.4 million motor vehicles were imported from non-EU countries, while the EU exported more than 6.3 million vehicles to non-EU countries in 2016, the commission's data shows. Almost half of these vehicles were transported by the carriers that have been fined today.

"The three separate decisions taken today show that we will not tolerate anticompetitive behavior affecting European consumers and industries. By raising component prices or transport costs for cars, the cartels ultimately hurt European consumers and adversely impacted the competitiveness of the European automotive sector, which employs around 12 million people in the EU," Commissioner Margrethe Vestager, in charge of competition policy, said.

MOL received full immunity

Japanese shipping company MOL received full immunity in the case since the start of the investigation because it revealed the existence of the cartel, thereby avoiding a fine of EUR 203 million.

CSAV, "K" Line, NYK and WWL-EUKOR benefited from reductions of their fines for their cooperation with the commission.

WWL-Eukor was hit with the highest fine worth EUR 207 million, NYK's fine amounts to EUR 141.8 million, "K " Line was fined with EUR 39.1 million and CSAV received a fine worth EUR 7 million.

"Whilst I deeply regret the outcome, we are pleased that the EC investigation has concluded. WWL group are committed to honest and fair business practices; this is an unfortunate part of our past and we must ensure it cannot occur again," WWL's CEO, Craig Jasienski, said.

The company said that it had made a provision for the outcome of the investigation, adding that the fine would not have a profit and loss effect.

During its investigation, the commission cooperated with several competition authorities around the world, including in Australia, Canada, Japan and the US.

The investigation has also resulted in finning of two suppliers of spark plugs with EUR 76 million, and two suppliers of braking systems with EUR 75 million, for taking part in cartels, in breach of EU antitrust rules.

February 21, 2018 by WorldMaritimeNews

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